December 14, [Sent via CY 2016 Family Care Final Capitation Rate Report.

Transcription

1 15800 Bluemound Road Suite 100 Brookfield, WI USA Tel Fax milliman.com December 14, 2015 Mr. Grant Cummings Benefit Rate and Finance Section Bureau of Long Term Care Financing Division of Long Term Care One West Wilson Street Madison, WI [Sent via Re: CY 2016 Family Care Final Capitation Rate Report Dear Grant: Thank you for the opportunity to assist the (DHS) with this important project. Our report summarizes the development of the final CY 2016 capitation rates for Wisconsin s Family Care program. We look forward to discussing those results with you. Sincerely, Michael C. Cook, FSA, MAAA Principal and Consulting Actuary michael.cook@milliman.com Mathieu Doucet, FSA, MAAA Consulting Actuary mathieu.doucet@milliman.com MCC/MD/cm cc: Michael Pancook, DHS Michelle Prost, DHS Lauralee Lueck, DHS John Meerschaert, Milliman Julia Friedman, Milliman Offices in Principal Cities Worldwide

2 Milliman Client Report State of Wisconsin Department of Health Services CY 2016 Capitation Final Rate Development for Family Care Program Prepared for: The State of Wisconsin Department of Health Services Prepared by: Milliman, Inc. Michael C. Cook, FSA, MAAA Principal and Consulting Actuary Mathieu Doucet, FSA, MAAA Consulting Actuary Bluemound Road Suite 100 Brookfield, WI USA Tel Fax milliman.com December 14, 2015

3 Milliman Client Report TABLE OF CONTENTS I. EXECUTIVE SUMMARY... 1 CY 2016 Final Capitation Rates... 1 Methodology Changes from CY 2015 Rates... 2 Data Reliance and Important Caveats... 3 II. BACKGROUND... 4 III. NURSING HOME LEVEL OF CARE METHODOLOGY OVERVIEW... 5 Base Experience Data Projection Methodology... 5 IV. NON-NURSING HOME LEVELS OF CARE METHODOLOGY OVERVIEW Base Experience Data Projection Methodology V. OTHER RATE CONSIDERATIONS Potential Retrospective Adjustments EXHIBITS Capitation Rate Development Nursing Home Level of Care: A: CY 2014 MCO Encounter Data for Base Cohort B: CY 2014 Family Care Completed Statewide Net Base Costs PMPM C1: CY 2016 Functional Status Regression Model Developmentally Disabled C2: CY 2016 Functional Status Regression Model Physically Disabled C3: CY 2016 Functional Status Regression Model Frail Elderly D1A: CY 2014 Base Population MCO/GSR Functional Screen Attribute Distribution Developmentally Disabled D1B: June 2015 Base Population MCO/GSR Functional Screen Attribute Distribution Developmentally Disabled D2A: CY 2014 Base Population MCO/GSR Functional Screen Attribute Distribution Physically Disabled D2B: June 2015 Base Population MCO/GSR Functional Screen Attribute Distribution Physically Disabled D3A: CY 2014 Base Population MCO/GSR Functional Screen Attribute Distribution Frail Elderly D3B: June 2015 Base Population MCO/GSR Functional Screen Attribute Distribution Frail Elderly E1: Projections to CY 2016 Rate Period E2: Benefit Adjustment and Gross CY 2016 Service Cost Rate Development F: Administrative Expense Allowance and Policy Adjustments G: Monthly and Daily Rates State of CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

4 Milliman Client Report TABLE OF CONTENTS (continued) Capitation Rate Development Non-Nursing Home Level of Care: H: CY 2014 MCO Encounter Data for Base Cohort I: CY 2014 Completed Statewide Base Costs PMPM J: CY 2016 Functional Status Model Development K: Composite of Functional Status Model by MCO/GSR L: Projections to CY 2016 Rate Period M: Administrative Expense Allowance and Policy Adjustments N: Monthly and Daily Rates Actuarial Certification: O: Actuarial Certification of CY 2016 Wisconsin Family Care Capitation Rates CMS Documentation: P: CMS Rate Setting Checklist Issues Q: 2016 CMS Medicaid Managed Care Rate Development Guide R: Annual Trend Assumption Development APPENDICES A: Geographical Service Region Map B: Projection of Total Expenditures State of CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

5 Milliman Client Report I. EXECUTIVE SUMMARY This report documents the development of the final January December 2016 (CY 2016) capitation rates for Wisconsin s Family Care program. The (DHS) retained Milliman to calculate, document, and certify its capitation rate development. We developed the capitation rates using the methodology described in this report. Our role is to certify that the CY 2016 capitation rates produced by the rating methodology are actuarially sound to comply with CMS regulations. CY 2016 FINAL CAPITATION RATES This report includes the development of the Managed Care Equivalent (MCE) rates and any additional policy adjustments made to the MCE that are known and quantifiable at this time. We use the term Managed Care Equivalent to mean the projected CY 2016 service and administrative costs prior to removing the HCRP withhold and prior to adding targeted margin loads or program changes implemented since the base period. The statewide average final CY 2016 capitation rate is $3, for the Nursing Home Level of Care (NH LOC) population and $ for the Non-Nursing Home Level of Care (Non-NH LOC) population. The capitation rates add targeted margin and the market variability adjustment to the MCE rates for the NH eligible population. The statewide average final CY 2016 MCE rate is $3, for the Nursing Home Level of Care (NH LOC) population and $ for the Non-Nursing Home Level of Care (Non-NH LOC) population. Table 1 shows the statewide rate change from the CY 2015 MCE rates to the CY 2016 MCE rates for each population. Table 1 Comparison of CY 2015 and CY 2016 MCE Rates NH LOC Non-NH LOC CY 2015 MCE Rates $3, $ CY 2016 MCE Rates 3, % Change 1.9% -7.6% The 1.9% increase in MCE rates from CY 2015 to CY 2016 for the combined NH / Non NH LOC populations can be broken down as follows: 0.9% decrease due to the difference between actual CY 2014 base cohort costs and the CY 2014 costs predicted as part of CY 2015 rate development comprised of: - Less than 0.1% increase due to differences in target population mix, - 0.2% decrease due to differences in base cohort data MCO / GSR definitions, - 0.7% decrease due to differences in cost and acuity after adjusting for member mix 1.5% increase due to differences in one year trend values applied to move CY 2014 costs to CY 2015 costs in the CY 2016 rate development versus the CY 2015 rate development, 0.6% increase due to application of service trend to project CY 2015 costs to CY 2016, 0.5% increase due to application of acuity trend to project CY 2015 acuity to CY 2016, State of Page 1 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

6 Milliman Client Report 0.3% increase due to reduced GSR 13 phase-in factor and increased risk score from CY 2015 to CY 2016, 0.2% decrease due to reduced administrative load on a PMPM basis, 0.0% increase due to all other pricing factors and interactions between them, and 0.1% increase due to changes in member target population, MCO, and GSR mix relative to projected CY 2015 experience. METHODOLOGY CHANGES FROM CY 2015 RATES The CY 2016 capitation rate methodology reflects several changes to the CY 2015 rate methodology. The most significant changes are listed and described below. High Cost Risk Pool Effective January 1, 2016, DHS is implementing a High Cost Risk Pool (HCRP) for the Developmentally Disabled and Physically Disabled populations. The HCRP will not be implemented for the Frail Elderly population due to the low probability of reaching the cost threshold. The HCRP is targeted to cover 80% of provider service costs above $225,000 for each individual and excludes Care Management expenses due to increased administrative burden to include them in this process. A pooling charge of $23.18 PMPM for the Developmentally Disabled population and $3.35 PMPM for the Physically Disabled population will be assessed from each MCO and placed into a pool. At year end, a settlement will be performed to determine payout to MCOs for each target group separately. Each MCO will receive the portion of each target group s pool equivalent to their percentage of total pooled costs statewide. MCOs may effectively have more or less than 80% of an individual s CY 2016 costs greater than $225,000 reimbursed depending on whether actual CY 2016 pooled costs are greater than or less than the target group pools. Individuals will be evaluated over their enrollment period and the $225,000 threshold will not be pro-rated for partial year enrollment. Risk Score Approach Presentation The presentation of the development of CY 2016 Family Care capitation rates includes a separate statewide base rate and MCO / GSR specific acuity risk scores to develop the capitation rates, instead of only showing the risk adjusted PMPM rates as in previous years. The risk score is derived from the regression models that are used to generate the risk adjusted PMPM rates for each target group. Additional detail on the data sources supporting the acuity trends is outlined in Step 3 of Section III below. The 2015 and 2016 approaches are consistent with each other and produce the same capitation rates. However, we believe that a risk score approach is more intuitive and allows for better acuity comparisons over time and across MCOs. Acuity Versus Service Cost Trend Presentation The presentation of the CY 2016 Family Care capitation rates also illustrates separate acuity and service cost trends to project waiver services to the rate period. Historically, DHS has used a single trend adjustment that incorporated both service cost and population acuity components. We believe that tracking acuity and service cost trend separately will incorporate more recent member acuity data and help stakeholders better understand the drivers behind the annual capitation rate changes. State of Page 2 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

7 Milliman Client Report DATA RELIANCE AND IMPORTANT CAVEATS We used MCO financial reporting, as well as encounter, eligibility, and functional screen data for CY 2013, CY 2014, and June 2015, and other information provided by DHS to develop the final Family Care capitation rates shown in this report. This data was provided by DHS. We have not audited this data and other information. If the underlying data or information is inaccurate or incomplete, the results of our analysis may likewise be inaccurate or incomplete. We performed a limited review of the data used directly in our analysis for reasonableness and consistency and have not found material defects in the data. If there are material defects in the data, it is possible that they would be uncovered by a detailed, systematic review and comparison of the data to search for data values that are questionable or for relationships that are materially inconsistent. Such a review was beyond the scope of our assignment. In order to provide the information requested by DHS, we constructed several projection models. Differences between the capitation rates and actual MCO experience will depend on the extent to which future experience conforms to the assumptions made in the capitation rate development calculations. It is certain that actual experience will not conform exactly to the assumptions used. Actual amounts will differ from projected amounts to the extent that actual experience is higher or lower than expected. Any MCO considering participating in Family Care should consider their unique circumstances before deciding to contract under these rates. Milliman prepared this report for the specific purpose of developing CY 2016 Family Care capitation rates. This report should not be used for any other purpose. This report has been prepared solely for the internal business use of and is only to be relied upon by the management of DHS. We understand this report may be shared with participating MCOs, CMS, and other interested parties. Milliman does not intend to benefit, or create a legal duty to, any third party recipient of its work. This report should only be reviewed in its entirety. The results of this report are technical in nature and are dependent upon specific assumptions and methods. No party should rely on these results without a thorough understanding of those assumptions and methods. Such an understanding may require consultation with qualified professionals. The authors of this report are consulting actuaries for Milliman, members of the American Academy of Actuaries, and meet the Qualification Standards of the Academy to render the actuarial opinion contained herein. To the best of their knowledge and belief, this report is complete and accurate and has been prepared in accordance with generally recognized and accepted actuarial principles and practices. The terms of Milliman s contract with the effective on January 1, 2015 apply to this report and its use. State of Page 3 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

8 Milliman Client Report II. BACKGROUND Family Care is a full-risk, comprehensive Medicaid managed care delivery system for the full range of long term care (LTC) services, which strives to foster people's independence and quality of life. Since 2000, Family Care has served people ages 18 and older with physical disabilities, people with intellectual / developmental disabilities and frail elders, with the specific goals of: Giving people better choices about where they live and what kinds of services and supports they get to meet their needs, Improving access to services, Improving quality through a focus on health and social outcomes, and Creating a cost-effective system for the future.0f1 Eligibility for Family Care is determined through the Wisconsin Long Term Care Functional Screen and detailed decision trees involving individual information about type of disability, activities of daily living, instrumental activities of daily living, and certain other medical diagnoses and health related services. While enrollment in Family Care is not mandatory, in recent years the significant majority of nursing home eligible beneficiaries in regions in which Family Care operates have been enrolled in Family Care, with others being enrolled in a self-directed care option or fee-for-service (FFS). The percentage of eligibles who enroll in the program has grown slowly over time. The risk adjustment model mechanism helps to adjust rates for any differences in average member acuity as the enrollment percentage increases. Family Care operates in most Wisconsin counties, which are grouped into 13 distinct Geographic Service Regions (GSRs) for rate setting and other purposes. MCOs contract with service providers to deliver all State Plan and waiver LTC services. Acute care services are provided under FFS Medicaid. In select counties, individuals eligible for Family Care can enroll in the Family Care Partnership program, in which both acute and long term care services are managed by MCOs. The Family Care Partnership program capitation rates are developed in a separate report. 1 (July 29, 2015). State of Page 4 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

9 Milliman Client Report III. NURSING HOME LEVEL OF CARE METHODOLOGY OVERVIEW This section of the report describes the CY 2016 Family Care capitation rate methodology for the Nursing Home Level of Care (NH LOC) population. BASE EXPERIENCE DATA PROJECTION METHODOLOGY The methodology used to project the MCO encounter data used in the calculation of the capitation rates can be outlined in the following steps: 1. Extract and summarize CY 2014 MCO encounter base experience data for the NH LOC population by target group. 2. Apply IBNR adjustments, remove pooled claims and restate MCO / GSR experience using the CY 2016 regression model. 3. Apply adjustments to the base experience data to project CY 2016 services costs for each MCO / GSR combination and target group. 4. Blend the projected CY 2016 service costs by target group into a MCO specific projected cost. 5. Apply service cost program adjustments and a market variability adjustment. 6. Add allowances for non-service costs. Each of the above steps is described in detail below. Step 1: Extract and Summarize Encounter Base Experience Data In this step the MCO encounter experience for CY 2014 is summarized by MCO / GSR and service category for the NH LOC populations enrolled in the Family Care program. Exhibit A shows the summarized CY 2014 MCO encounter base experience data for target group. Please see Appendix A for a map showing the counties included in each GSR. Base Data: We received detailed MCO encounter claims data from DHS for claims with dates of service between January 2011 and December 2014 with dates of payment through March This data reflects payments net of any third party liability. These costs are also gross of member cost share / patient liability, as DHS adjusts capitation payments to MCOs for each member to reflect that particular member s cost share. We reviewed the data and validated both provider service and care management expenditures against financial statements for accuracy and completeness of the data provided. The base period data includes only those eligibles actually enrolled in the Wisconsin Family Care program, so no adjustment for retroactive eligibility periods is needed. For the CY 2014 data, about 0.06% of total provider service and case management dollars are excluded due to a lack of corresponding enrollment records. The volume of encounter costs excluded from the base data summaries is very similar to previous year data sets. State of Page 5 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

10 Milliman Client Report The CY 2016 rate methodology relies on CY 2014 MCO encounter data for MCO / GSR combinations that are deemed credible based on MCO / GSR size and program maturity. The CY 2014 base cohort consists of the following MCO / GSR combinations. Table 2 Base Cohort Population Details MCO CY 2014 Data Care Wisconsin GSR 2, GSR 5, GSR 5-6, GSR 6 CCCW GSR 4, GSR 7 CCI GSR 6, GSR 5-6, GSR 8, GSR 10, GSR 11 ContinuUs GSR 1, GSR 3 LCD GSR 9 MCDFC GSR 8, GSR 11 WWC GSR 2 Target Group Assignment: The NH LOC capitation rates rely on a member s classification in one of three target groups: Developmentally Disabled, Physically Disabled, and Frail Elderly. Each Family Care enrollee is assigned a target group based on information collected by the Long-Term Care Functional Screen (LTCFS) system. The assigned target group is only valid for the period covered by the screen. Therefore, individuals could potentially change target groups at each screening. Care Management Expenditures: Care Management expenditures are included in the base cohort data as a service cost. The Care Management expenses are trued up to financial statements due to the difficulty in properly and completely collecting this information in the encounter data reporting format. Table 3 below shows the encounter data to financial statement reconciliation adjustment for Care Management expenditures. Table 3 Encounter Data to Financial Statement Reconciliation Adjustment MCO CY 2014 Care Wisconsin 29.6% CCCW 11.3% CCI -7.0% ContinuUs -0.4% LCD -0.5% MCDFC -8.6% WWC -1.2% The adjustment for Care Wisconsin in CY 2014 is particularly large due to data submission issues related to care management expenses in November and December Care Management Expenditures are reconciled for the NH LOC and Non-NH LOC populations in aggregate. State of Page 6 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

11 Milliman Client Report High Cost Risk Pool: Effective January 1, 2016, DHS is implementing a HCRP for the Developmentally Disabled and Physically Disabled populations. The HCRP will not be implemented for the Frail Elderly population due to the low probability of reaching the cost threshold. The HCRP is targeted to cover 80% of provider service costs above $225,000 for each individual and excludes Care Management expenses due to increased administrative burden to include them in this process. Table 4 below illustrates the service costs removed from the base period data for implementing the HCRP. We examined the encounter data and counted the members and costs associated with annual non-case management claims in excess of $225,000 in CY 2014 by target population group. Table 4 HCRP Service Costs Removed (PMPM) MCO / GSR DD PD Care WI / GSR 2 $0.00 $0.00 Care WI / GSR Care WI / GSR Care WI / GSR CCCW / GSR CCCW / GSR CCI / GSR CCI / GSR CCI / GSR CCI / GSR CCI / GSR ContinuUs / GSR ContinuUs / GSR LCD / GSR MCDFC / GSR MCDFC / GSR WWC / GSR The percentage of costs removed from the base period data for the HCRP is added back to projected CY 2016 target group service costs as a fixed, statewide pooling charge in Step 4. Non-Covered Services Adjustment: MCOs are allowed to provide LTC services not explicitly covered under Family Care to beneficiaries, most often in lieu of a covered service. As part of the capitation rate development process, the encounter data is adjusted to remove the portion of the cost of in-lieu-of services that exceeds the cost of the corresponding covered service. For the Nursing Home Level of Care population, we compared the average unit cost between non-covered residential care services and covered nursing home stays to determine the cost-effectiveness of residential care services. Non-covered residential care services are provided in-lieu-of covered nursing home stays for nursing home eligible enrollees. Residential care services comprise about 46% of total base period costs for the Nursing Home Level of Care population. The results of our analysis show that non-covered State of Page 7 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

12 Milliman Client Report residential care is a cost effective substitute for nursing home stays for each MCO / GSR combination. Therefore, we made no adjustments to the base data for this analysis, consistent with previous years. Table 5 below shows a summary of the unit cost comparison by MCO and GSR. Table 5 Comparison of Residential Care and Nursing Home Services Unit Costs Statewide Nursing Home $ Cost Per Unit MCO / GSR Residential Care Cost Per Unit Care WI / GSR Care WI / GSR Care WI / GSR Care WI / GSR CCCW / GSR CCCW / GSR CCI / GSR CCI / GSR CCI / GSR CCI / GSR CCI / GSR ContinuUs / GSR ContinuUs / GSR LCD / GSR MCDFC / GSR MCDFC / GSR WWC / GSR Step 2: Apply IBNR Adjustment, Remove Pooled Claims, and Restate MCO / GSR Base Period Costs Using Acuity Model In this step we apply an adjustment to the base period costs to account for outstanding service cost liability and reflect MCO liability under the HCRP. We then restate service costs for each target population, MCO, and GSR combination using a risk acuity model developed from CY 2014 costs and functional screens. Exhibit B shows adjusted values for each target group. IBNR Adjustment: We developed completion factors (CFs) by MCO / GSR in aggregate due to the small magnitude of the adjustments. We used Milliman s Claim Reserve Estimation Workbook (CREW) to calculate the completion factors shown in Table 6 below. CREW calculates incurred but not reported (IBNR) reserve estimates by blending two different estimation methods: The lag completion method and the projection method. State of Page 8 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

13 Milliman Client Report The lag method reflects the historical average lag between the time a claim is incurred and the time it is paid. In order to measure this average lag, claims are separated by month of incurral and month of payment. Using this data, historical lag relationships are used to estimate ultimate incurred claims (i.e., total claims for a given incurral month after all claims are paid) for a specific incurral month based on cumulative paid claims for each month. The projection method develops estimates for incurred claims in recent incurral months by trending an average base period incurred cost per unit to the midpoint of the incurred month at an assumed annual trend rate, and applying an additional factor to account for the seasonality of claim costs and the differing number of working days between months. The base period is chosen by selecting a group (usually 12) of recent consecutive months for which the lag completion method provides reasonable results. The lag completion and projection methods are combined to produce the final incurred claim estimate. Final incurred claim estimates are calculated as a weighted average of these two methods. Table 6 below shows the IBNR adjustment factors applied to the CY 2014 experience data. Table 6 Incurred But Not Reported Adjustment Factors MCO / GSR Adjustment Factors Care WI / GSR Care WI / GSR Care WI / GSR Care WI / GSR CCCW / GSR CCCW / GSR CCI / GSR CCI / GSR CCI / GSR CCI / GSR CCI / GSR ContinuUs / GSR ContinuUs / GSR LCD / GSR MCDFC / GSR MCDFC / GSR WWC / GSR Functional Status Acuity Model Cost Restatement We developed the NH LOC functional status models from MCO-reported experience for CY 2013 and CY 2014; two years of data were used in order to improve the credibility and stability of the models. A regression model was independently developed for each of the three target groups (Developmentally Disabled, Physically Disabled, and Frail Elderly) using the corresponding population's functional screen, claim and eligibility data. Wisconsin's Long-Term Care Functional Screen system provided the member level detail underlying each model. The functional status models for the Developmentally Disabled and Physically Disabled populations are developed using the net MCO liability under the HCRP program that will be implemented in CY State of Page 9 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

14 Milliman Client Report The attached Exhibits C1 - C3 show the NH LOC functional status acuity models for the Developmentally Disabled, Physically Disabled, and Frail Elderly, respectively. The estimated impact on the cost for each variable is shown along with its significance (i.e., p-value), relative contribution in explaining the variation (i.e., Incremental Partial R 2 ) and the proportion of the population with the characteristic. Table 7 below provides a high level comparison between the CY 2015 and CY 2016 models for each target group. Table 7 Comparison of CY 2015 and CY 2016 Functional Status Models Nursing Home Level of Care Developmentally Physically Frail Elderly Disabled Disabled CY 2016 R % 46.4% 38.9% CY 2015 R % 41.6% 35.2% R 2 Percentage Change +6.9% +4.8% +3.7% Exhibits D1A, D2A, and D3A develop the restated base period costs for each MCO / GSR combination as modeled by the functional status acuity model. The acuity model is normalized to be budget neutral in total. Therefore, the CY 2014 costs for each target population base data cohort are unaffected in total. Total base period costs for the small enrollment MCO / GSR combinations excluded from the base data cohort due to credibility concerns are impacted by the acuity model, though the impact on total program costs is immaterial. Exhibits D1B, D2B, and D3B develop the risk score and cost PMPM as modeled by the functional status acuity model using the June 2015 Family Care enrollment for the NH LOC population. Step 3: Apply Adjustments to the Restated Base Experience Data to Project CY 2016 Service Costs In this step we apply adjustment factors to reflect differences between the base period encounter data and the projected CY 2016 Family Care program service costs. Each adjustment factor is explained in detail below and shown in Exhibit E1. Exhibit E1 also shows adjusted and trended values for each target group and in total. State of Page 10 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

15 Milliman Client Report Service Cost Trend from CY 2014 to CY 2016: Trend rates were used to project the CY 2014 baseline cost data beyond the base cost period to the CY 2016 contract period, to reflect changes in provider payment levels and changes in average service utilization and mix. To assist in developing these trend rate projections, we analyzed monthly Family Care MCO encounter data from CY 2012 through CY 2014 in a number of different ways. We excluded November 2014 and December 2014 from our analysis because those months are not complete in our data set. In addition, after discussions with DHS, we excluded certain MCO / GSR combinations from our analysis because of extraordinary events occurring during the time period examining, including: Changes in the MCO administering the program, Implementation of one-time cost control strategies, and Significant initial economies of scale realized as a new MCO s regional enrollment grows. Finally, DHS made recommendations on MCO / GSR combinations to exclude from the analysis for MCOs that performed substantially different than the functional acuity model predicted from year to year. See Exhibit R for the results of our analysis. The trend analysis was completed for monthly PMPM costs on a raw basis and on an acuity-adjusted basis. Since this rate development process applies acuity adjustments separately from service cost trend, we considered the acuity-adjusted trends in rate development. There were no material program changes in the base data time period for which to adjust the data in the trend analysis. The PMPM trends in the trend analysis include the impact of service utilization / mix and unit cost changes. DHS analyzed unit cost changes in residential and institutional expenditures in order to develop separate unit cost and utilization components of the trend estimates. There were no material changes in unit cost for non-residential services over that time period. To calculate the service cost component of the trend estimates, DHS calculated both the weighted average change in service costs of residential services using CY 2013 residential expenditures and the percentage increase in Medicaid fee-for-service nursing home rates from CY 2012 through CY The Department weighted the projected residential and nursing home rate changes by their proportion of CY 2013 service expenditures to estimate unit cost increases across the program. Institutional and residential expenditures account for about 57 percent of Family Care expenditures. The utilization trend assumptions were derived by backing out the unit cost trend assumptions from PMPM trend assumptions. These increases are comparable to increases implemented in CY 2015 and are appropriate to expect to continue for CY We do not expect there to be material unit cost increases in CY 2015 or CY 2016 for other services. Table 8 illustrates the final trend values implemented for the CY 2016 rate development for each target group. The values are consistent with the historical trend analysis described above. The utilization trends are comparable to trends realized in other Medicaid managed long term care programs. Table 8 Annual Trend Rates by Target Group Target Group Annual Utilization Trend Developmentally Disabled -0.25% 0.25% Physically Disabled -0.20% 0.7% Frail Elderly 0.89% 1.0% Annual Unit Cost Trend State of Page 11 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

16 Milliman Client Report June 2015 Acuity-Adjusted Costs: The column labeled MCO / GSR Specific Risk Adjusted Rate in Exhibit E illustrates the acuity-adjusted service cost for each MCO / GSR combination using the base period regression model (reflecting the CY 2014 utilization and unit cost structure) and the June 2015 Family Care population functional screens. Table 9 below illustrates the increase in average modeled acuity between CY 2014 and the June 2015 snapshot underlying Exhibit E. Table 9 Acuity Change Between CY 2014 and June 2015 Target Group Acuity Change Developmentally Disabled 2.6% Physically Disabled 1.4% Frail Elderly 1.5% Acuity Adjustment from CY 2015 to CY 2016: In order to develop rates based on expected CY 2016 member acuity levels, we apply one year of projected acuity trend to the June 2015 acuity-adjusted costs. As part of the historical trend study, we developed CY CY 2014 changes in average acuity for each target population. We believe these changes in average acuity, as outlined in Table 10 below, are appropriate to assume continuing for CY CY Table 10 Annual Trend Rates by Target Group Target Group Annual Acuity Trend Developmentally Disabled 1.3% Physically Disabled -1.1% Frail Elderly 0.3% Geographic Wage Adjustment: The functional status acuity model does not include any consideration for the difference in service costs associated with providing care in different regions of the Family Care service area. Therefore, we analyzed the differences in typical service provider wages, as surveyed by the U.S. Bureau of Labor Statistics (BLS), for each GSR relative to the total Family Care service area to develop factors that adjust projected service costs up or down for each GSR. We first developed base cohort county factors based on the wage levels paid in the base cohort counties relative to the entire Family Care service area for five broad categories of service. DHS previously developed an anticipated distribution of provider occupations for each category of service. As such, we used wage data reported by the BLS as of May 2014 (downloaded on July 8, 2015) for the following occupations: Registered nurses, licensed practical nurses, medical and public health social workers, social and human services assistants, home health aides, and personal care / home care aides. The relative wage factors for each category of service were aggregated to one factor for each county using the relative Family Care costs for these services for all MCOs combined in the base cohort. State of Page 12 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

17 Milliman Client Report Wage factors were first calculated for each county individually. Then these county factors were weighted based on projected CY 2016 enrollment in order to develop aggregate factors for each GSR as detailed in Table 11 below. Table 11 CY 2016 Geographic Wage Adjustment Factors Family Care Program GSR Calculated Factor Dampened Factor GSR GSR GSR GSR GSR GSR GSR GSR GSR GSR GSR GSR GSR 12 N/A N/A GSR Unassigned N/A N/A Based on previous analyses performed by DHS, in collaboration with the MCOs, it was determined that, on average, 70% of an MCO's service cost would be impacted by wage differentials. Therefore, the dampened factors in the last column of Table 11 were utilized in CY 2016 rate development. GSR 13 Phase-In Adjustment: Family Care started operating in GSR 13 in June 2015, whereas the base data cohort and other pricing assumptions used to develop projected CY 2016 service costs reflect a mature managed care delivery system. With the understanding that it takes time to develop managed care infrastructure and positively influence member and provider behavior, we phase in the modeled impact of managed care on historical FFS costs of about 18% over three years. This is a continuation of the phase-in adjustment applied in CY 2015 rate development, though at a lower level to account for the additional time GSR 13 MCOs will have been operating in CY The impact of this adjustment relative to the acuity modelled costs is +11.9%. Step 4: Add HCRP Pooling Charge and Blend Projected Service Costs by Target Group In this step, we first add costs in Section E2 equal to $23.18 PMPM for the Developmentally Disabled population and $3.35 PMPM for the Physically Disabled population for implementation of the HCRP. The PMPM values are equivalent to the 0.6% and 0.1%, respectively, of base period costs removed for the HCRP. These values will be withheld from initial plan payment and paid out to MCOs on a budget neutral basis proportional to plan costs above the HCRP threshold. State of Page 13 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

18 Milliman Client Report We then blend the total projected CY 2016 MCO / GSR service costs for each target group based on the projected CY 2016 target group membership. The blended costs are reflected in the bottom sections of Exhibit E1 and E2. For an MCO with limited or no enrollment in a particular region, the projected cost is developed using the variable distributions for each functional status model that reflects all Family Care enrollees in that region. For MCOs that are entering into GSR 13, the screen information is derived from the waiver / waitlist populations for eligible membership in that region. Step 5: Apply Service Cost Program Adjustments and a Market Variability Adjustment In this step we adjust projected MCO / GSR CY 2016 service costs for issues not accounted for in the previous steps. These adjustments are shown in Exhibit E2. New Long-Term Care Benefits Effective January 1, 2015, the Family Care benefit package was expanded to include Consultative Clinical and Therapeutic Services for Caregivers and Training for Unpaid Caregivers. DHS developed an adjustment to projected 2016 service costs to reflect the anticipated financial impact of the new benefits, not reflected in the CY 2014 base data, based on the cost and utilization of similar waiver services. DHS used the unit cost for Counseling and Therapeutic Services as a proxy for the new service unit costs and assumed that 3% of members would utilize these new services. This utilization rate is based on existing Counseling and Therapeutic Services and Consumer Education and Training utilization. Housing Counseling and Relocation Services, which are existing services that provide counseling for specific purposes, were also used as benchmarks in determining that the new services are also likely to be used as infrequently as once per quarter. Overall, DHS determined that the cost for the new LTC benefits are $0.67 PMPM. Market Variability Adjustment The level of care management cost savings actually realized for each MCO / GSR combination will vary based on a number of factors including availability of a comprehensive community-based service array, MCO experience and effectiveness, provider negotiating leverage and advocate community impacts. In order to incorporate this variability into rate development, we developed a range of reasonable and appropriate market variability adjustments. The range of potential market variability factors for CY 2016 is 0.94 to We developed these factors based on a review of actual CY 2013 and CY 2014 MCO / GSR service costs relative to costs predicted by the functional acuity model and corresponding member functional screens for those rating years for the Family Care program population. We excluded MCO / GSRs from the analysis that were not included in the base period cohort (CY 2013 or CY 2014) for rating years CY 2015 and CY 2016, respectively. The total range of results varied from 0.89 to 1.06, which we narrowed to account for natural variation that is expected in any at-risk managed care program. Sixty four percent of the CY 2013 and CY 2014 results fell within the assumption range we ultimately chose for the CY 2016 rate development. State of Page 14 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

19 Milliman Client Report Table 12 outlines the final market variability factors applied in this report. They were chosen based on DHS current knowledge of historical MCO / GSR LTC service and acuity experience, recent financial performance and projected surplus levels. Table 12 CY 2016 Market Variability Adjustment Family Care Program MCO / GSR Market Variability Adjustment Care WI / GSR Care WI / GSR Care WI / GSR Care WI / GSR Care WI / GSR CCCW / GSR CCCW / GSR CCI / GSR CCI / GSR CCI / GSR CCI / GSR CCI / GSR CCI / GSR ContinuUs / GSR ContinuUs / GSR ContinuUs / GSR ContinuUs / GSR LCD / GSR LCD / GSR LCD / GSR MCDFC / GSR MCDFC / GSR MCDFC / GSR MCDFC / GSR WWC / GSR Step 6: Add Allowance for Non-Service Expenses In this step, we develop the non-service cost allowance for the Nursing Home-eligible population. Non-service expense loads and resulting MCE and capitation rates are shown in Exhibit F. Equivalent daily capitation rates and the rate split between LTC services and non-service costs are shown in Exhibit F. DHS worked in collaboration with the MCOs to develop a sustainable approach to determine the administrative funding levels for the Family Care program. DHS developed the administrative funding methodology to address new and expanding MCOs, the size of an MCO's enrolled population, and the determination of program operational costs. As a result, DHS and the MCOs formed "small work groups" (SWG) in 2009 to help assess the type and range of administrative costs. For the CY 2016 rate development MCOs provided updated financial and employee data in the same structure developed by the SWGs, which DHS reviewed and analyzed in order to update the administrative cost model assumptions. State of Page 15 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

20 Milliman Client Report Findings from the SWGs showed that there are nine primary administrative components that are typically incurred by an MCO that participates in the Family Care program as follows: Administrative and Executive, Compliance, Human Resources, Marketing, Provider Management, Claims Management, Fiscal Management, Information Management, and Quality Management. Within each of these administrative components, the MCOs provided the number of full-time equivalent employees (FTEs), the corresponding expense per FTE, and the administrative expenditures. MCOs and DHS classified each administrative expenditure category as fixed or variable costs. The sections below provide details on the handling of each type of expenditure in the determination of an allowance for non-service expenses. Fixed Cost The fixed cost portion of the administrative allowance decreases on a PMPM basis as MCOs increase the number of enrolled members. For example, as MCOs continue to expand there is no need to hire an additional CEO, although the demands on the CEO will increase, perhaps leading to the need for higher compensation. Therefore, executive costs as a percentage of capitation revenue will decrease as MCOs become larger; a similar argument can be applied to the other five fixed cost components, which may increase somewhat with growth in the size of the enrolled population, but not in a direct way. As a result DHS has structured its approach to assess a reasonable number of personnel to have on staff for each component based on MCO size. To accommodate the personnel needs of different sized MCOs for their fixed administrative costs, DHS has developed three tiers within each component to account for different staffing expectations at small, medium, and large MCOs. MCOs are assigned a tier based on their projected CY 2016 enrollment. The resulting fixed PMPM costs are calculated for each MCO as the projected number of FTEs, and their corresponding expense, divided by the projected number of member months. DHS used the enrolled members, number of full-time equivalents (FTEs), and expense per FTE as reported by each MCO to assess and determine appropriate assumptions. State of Page 16 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

21 Milliman Client Report Table 13 shows the fixed cost assumptions used to develop the final CY 2016 MCE rates. Tier Table 13 Detailed Assumptions for Fixed Cost Component of Non-Service Allowance FTE Assumptions: Fixed Cost Component Admin / Executive Compliance HR Marketing Provider Mgmt. Fiscal Small Medium Large Claims Mgmt. Expense per FTE Assumptions: Fixed Cost Component Small $206,359 $111,199 $117,810 $109,780 $111,804 $129,228 $88,935 Medium 187, , , , , ,480 80,850 Large 178,220 96, , ,780 96, ,606 80,850 Total Expense Assumptions: Fixed Cost Component Small $1,273,568 $114,379 $363,538 $112,920 $1,035,014 $1,329,239 $182,957 Medium 1,543, , , ,920 1,150,016 1,570, ,487 Large 2,199, , , ,920 1,291,154 1,836, ,487 It is important to note that for CY 2016, DHS moved a portion of the cost related to fiscal management activities to the fixed cost portion of the non-service allowance calculations. Variable Costs The variable portion of administrative costs increases proportionately with the number of members enrolled by an MCO. Therefore, DHS determined a single PMPM cost assumption for each of the variable components. DHS used the PMPM cost projections as reported in the SWG documents as the basis to derive a point estimate for each component. Table 14 shows the variable cost assumptions used to develop the CY 2016 capitation rates. Table 14 Variable Cost Components of Non-Service Allowance Cost Component PMPM Cost Claims Management $16.90 Fiscal Management 5.17 Information Management Quality Management State of Page 17 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

22 Milliman Client Report OCI Adjustment Similar to last year, DHS is providing a modest amount of funding ($0.55 PMPM) to be used as a provision for the Office of the Commissioner of Insurance's (OCI's) financial oversight function. This amount was derived by dividing the total contracted amount ($270,900) by the total projected enrollment for both NH LOC and Non-NH LOC in CY 2016 (460,364 member months). By contract, MCOs will be required to use 100% of these funds to pay for these OCI services, as a cost of doing business. Targeted Risk Margin / Contribution to Reserves We include an explicit 0.5% targeted margin to account for cost of capital and contribution to MCO reserves as underlying service costs increase over time. We believe that this margin is appropriate given the predictability of expenses under the program. State of Page 18 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

23 Milliman Client Report IV. NON-NURSING HOME LEVEL OF CARE METHODOLOGY OVERVIEW This section of the report describes the CY 2016 Family Care capitation rate methodology for the Non-Nursing Home Level of Care (Non-NH LOC) population. BASE EXPERIENCE DATA PROJECTION METHODOLOGY The methodology used to project the MCO encounter data used in the calculation of the capitation rates can be outlined in the following steps: 1. Extract and summarize CY 2014 MCO encounter base experience data for the Non-NH LOC population by target group 2. Apply IBNR adjustment to establish base period cost 3. Convert Target Group based summaries to functional status categories 4. Blend the base functional status model amounts into a MCO specific projected cost 5. Apply adjustments to the base experience data to project CY 2016 services costs for each MCO / GSR 6. Add allowance for non-service costs Each of the above steps is described in detail below. Step 1: Extract and Summarize Encounter Base Experience Data In this step the MCO encounter experience for CY 2014 is summarized by MCO / GSR and service category for the Non-NH LOC populations enrolled in the Family Care program. We used the same process to summarize and validate the MCO encounter data for the Non-NH LOC population as the one described in Section III of this report for the NH LOC population. The CY 2016 Non-NH LOC rate methodology also relies on CY 2014 MCO encounter data for the same MCO / GSR combination that are deemed credible for the NH LOC population. Identical processes are used to assign target group and reconcile Care Management expenses as used for the NH LOC population. However, the Non-NH LOC population is not subject to the HCRP. Therefore, no adjustment is made. Non-Covered Services Adjustment: MCOs are allowed to provide LTC waiver services under Family Care that are not explicitly covered for Non-NH LOC beneficiaries, most often in lieu of a covered service. As part of the capitation rate development process, the encounter data is adjusted to remove the portion of the cost of in-lieu-of services that exceeds the cost of the corresponding state plan service. The two most significant covered services that are substituted for are personal care and transportation services. State of Page 19 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

24 Milliman Client Report In addition, costs for certain non-covered services were excluded because they do not have a comparable covered service under Family Care. According to CMS, non-covered services that do not have a comparable covered service cannot be included in the capitation rate development. These services include supported employment, certain institutional services, and other services. Table 15 below shows a summary of the amounts for non-covered services to be excluded by MCO and GSR. Table 15 Excluded Amounts for Non-Covered Services MCO / GSR Amount Care WI / GSR 2 $4,512 Care WI / GSR 5 19,403 Care WI / GSR 5-6 3,074 Care WI / GSR 6 68 CCCW / GSR 4 26,763 CCCW / GSR 7 22,620 CCI / GSR 5-6 7,504 CCI / GSR 6 4,265 CCI / GSR 8 21,583 CCI / GSR 10 4,587 CCI / GSR 11 6,112 ContinuUs / GSR 1 0 ContinuUs / GSR 3 2,674 LCD / GSR MCDFC / GSR 8 4,515 MCDFC / GSR WWC / GSR 2 8,765 Total $137,153 In total, we excluded $137,153 from the Non-NH CY 2016 capitation rate development for non-covered services. The volume of excluded costs, representing 2% of the base period costs, is consistent with previous years. Exhibit H shows the summarized CY 2014 MCO encounter base experience data for target group net of the non-covered services exclusion. Step 2: Apply IBNR Adjustment In this step we apply an adjustment to the base period costs to account for outstanding service cost liability for each MCO and GSR combination using the same IBNR factors show in Table 6. Exhibit I shows adjusted values for each target group. State of Page 20 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

25 Milliman Client Report Step 3: Convert Target Group Based Summaries to Functional Status Categories In this step we summarize the CY 2014 MCO experience data into the functional status model categories. The Non-NH level of care functional status models are based on MCO-reported experience for CY 2014 and stratify claims experience based on an individual's level of need, using their sum of ADLs and IADLs. The ADLs and IADLs are each separated into "low" and "high" levels of need. A "low" level of need corresponds to an individual that has an ADL / IADL count of two or less. A "high" level of need corresponds to an individual that has an ADL / IADL count of three or more. The rates are developed based on four distinct cohorts: Low IADL and low ADL level of need, Low IADL and high ADL level of need, High IADL and low ADL level of need, and High IADL and high ADL level of need. Consistent with the summaries by target group, the cost for each functional status category is adjusted for in-lieu-of services that are excluded from the base period and for IBNR claims. Exhibit J shows starting and adjusted values for each functional status category. Step 4: Blend the Base Functional Status Model Amounts into an MCO Specific Projected Cost In this step we develop a MCO / GSR specific PMPM by blending the functional status PMPMs using their projected CY 2016 enrollment. For an MCO with limited or no enrollment in a particular region, the projected cost is developed using the IADL / ADL enrollment distribution that reflects all Family Care enrollees in that region. For MCOs that are entering into GSR 13, the IADL / ADL enrollment distribution is based on the total base cohort distribution. Exhibit K shows the blending process for each MCO / GSR combination. Step 5: Apply Adjustments to the Base Experience Data to Project CY 2016 Services Costs for Each MCO / GSR In this step we apply an adjustment to the base period costs to project costs from the CY 2014 base period to the CY 2016 contract period. These adjustments are shown in Exhibit L. CY 2014 to CY 2016 Trend Adjustment: Unlike for the NH LOC population, the blended functional status PMPM is not adjusted for June 2015 enrollment acuity characteristics. Therefore, both service cost and acuity changes are applied for two years. Table 16 below shows the cost and acuity trends used, which are equivalent to those shown in Tables 8 and 10, respectively. State of Page 21 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

26 Milliman Client Report Table 16 Annual Trend Rates by Target Group Annual Utilization Annual Annual Target Group Trend Unit Cost Trend Acuity Trend Developmentally Disabled -0.25% 0.25% 1.3% 1.3% Physically Disabled -0.20% 0.7% -1.1% -0.6% Frail Elderly 0.89% 1.0% 0.3% 2.2% Annual Total Trend Geographic Wage Adjustment: Since the base cost data represents an average program cost, an adjustment for each MCO / GSR is needed to reflect difference in service costs associated with providing care in different regions of the Family Care service area. We used the same geographic wage adjustment factors as for the NH LOC population and documented in Table 11 from Section III of this report. Step 6: Add Allowance for Non-Service Costs In this step, we develop the non-service cost allowance for the Non-NH eligible population. Non-service expense loads and resulting MCE and capitation rates are shown in Exhibit M. Equivalent daily capitation rates and the rate split between LTC services and non-service costs are shown in Exhibit N. The allowance for non-service costs for the Non-NH LOC population is developed as the implied non-service cost allowance percentage for the NH LOC population. As described in Section III of this report, the allowance for non-service costs for the NH population is developed from a combination of fixed and variable cost components as determined by DHS and the MCOs, and is also inclusive of the $0.55 OCI Fee described in the NH LOC section above. Once the total dollar allowance is developed, it is possible to determine the non-nh LOC allowance. These same allowances as percentages of the MCE are used for both the NH LOC and Non-NH LOC so that the proportion between service and non-service costs are maintained between the two populations. We include an explicit 0.5% targeted margin to account for cost of capital and contribution to MCO reserves as underlying service costs increase over time. We believe that this margin is appropriate given the predictability of expenses under the program. State of Page 22 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

27 Milliman Client Report V. OTHER RATE CONSIDERATIONS POTENTIAL RETROSPECTIVE ADJUSTMENTS Several retrospective adjustments not reflected in this report may be made if experience for certain issues outside the MCO control do not substantially conform to assumptions in this rate development. These adjustments, which are expected to be completed by December 31, 2017, include: Target Group Adjustment: DHS will reconcile the LTC service components of capitation payments to the actual target group mix experienced during AIDS / Ventilator Dependent Reconciliation DHS will reconcile the LTC service component of capitation payments to the actual percentage of members dependent on ventilators enrolled in each MCO in 2016 relative to the percentage experienced in the base period data. The cost relativity between ventilator dependent members and other members will also be utilized to determine the magnitude of the reconciliation. Program Implementation in New Regions: In geographic regions that are new to Family Care, the LTC services component of the capitation rate may be reconciled to the actual 2016 acuity of an MCO s membership, as measured by the LTC functional screen. The determination of whether this reconciliation is made depends on the materiality of the difference of the actual 2016 acuity and the acuity assumed in this rate development. Nursing Home Closure Adjustment: In the event of the closure of an institutional facility, DHS may consider an adjustment in the capitation rate if the MCO quantifies a material cost increase due to an increase in the number of members who enrolled with the MCO in 2016 and who meet both of the following conditions: 1) Has a nursing home stay greater than 100 consecutive days during 2016 after enrollment; and 2) Enrolled within 32 calendar days of their nursing home discharge date, or enrolled while residing in a nursing home. Other Non-Capitated Payments Relocation Incentive Payment DHS will provide a one-time incentive payment to the MCO for each MCO member who is relocated from an institution into a community setting consistent with federal Money Follows the Person (MFP) guidelines. State of Page 23 CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

28 Milliman Client Report Exhibit A - G Capitation Rate Development Nursing Home Level of Care State of CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

29 Exhibit A Summary of 2014 Actual Experience by MCO Nursing Home Level of Care Care WI (GSR 2) Care WI (GSR 5) Care WI (GSR 5-6) Care WI (GSR 6) DD PD FE DD PD FE DD PD FE DD PD FE Exposure Months ,407 5,659 5,580 8,955 3,299 5, Category of Service Adaptive Equipment $43.40 $ $47.96 $41.08 $ $55.34 $40.41 $74.94 $41.23 $23.71 $ $47.77 Adult Day Activities Case Management Habilitation/Health Home Care Home Health Care Housing Institutional Other Residential Care , , , , , , Respite Care Transportation Vocational Total Services $2, $1, $1, $3, $2, $2, $3, $2, $2, $4, $2, $2, Room and Board Room and Board Collections (127.61) (44.41) (129.42) (322.35) (178.90) (420.52) (312.25) (251.44) (471.59) (226.81) (72.90) (365.74) Room and Board Costs Total Room and Board $9.31 $17.48 $50.60 $11.68 $44.24 $74.63 $14.54 $84.75 $97.07 $26.95 $95.94 $96.83 Total Pooled Claims ($) ¹ Total Pooled Claims (%) ¹ 0.0% 0.0% 0.0% 2.0% 0.6% 0.0% 1.1% 0.7% 0.0% 0.0% 0.0% 0.0% Grand Total $2, $1, $1, $3, $2, $2, $3, $2, $2, $4, $2, $2, Composite PMPM $1, $3, $3, $3, ¹ Pooled Claims represents the High Cost Risk Pool (HCRP) claims. It is implemented only in the PD and DD Target Groups for Family Care. Please see capitation rate memorandum for further details on the HCRP. 12/14/2015 Milliman, Inc. Page 1 of 5

30 Exhibit A Summary of 2014 Actual Experience by MCO Nursing Home Level of Care CCCW (GSR 4) CCCW (GSR 7) CCI (GSR 5-6) CCI (GSR 6) DD PD FE DD PD FE DD PD FE DD PD FE Exposure Months 18,327 8,861 12,422 10,760 6,079 7,585 6,474 2,681 3,804 11,360 4,177 6,312 State Plan Services Adaptive Equipment $43.46 $ $68.76 $31.20 $84.76 $55.51 $39.21 $78.21 $36.36 $33.06 $87.28 $42.73 Adult Day Activities Case Management Habilitation/Health Home Care Home Health Care Housing Institutional Other Residential Care 1, , , , , , , , Respite Care Transportation Vocational Total State Plan Services $3, $2, $2, $3, $2, $2, $3, $2, $2, $3, $2, $2, Room and Board Room and Board Collections (215.34) (132.03) (378.73) (309.74) (140.26) (295.27) (299.18) (210.94) (483.60) (347.82) (225.56) (495.74) Room and Board Costs Total Room and Board $2.62 $12.62 $48.74 $8.99 $27.34 $30.98 $2.74 $36.84 $53.71 $13.22 $27.44 $67.04 Total Pooled Claims ($) ¹ Total Pooled Claims (%) ¹ 0.5% 0.0% 0.0% 0.4% 1.3% 0.0% 1.8% 0.0% 0.0% 1.2% 0.3% 0.0% Grand Total $3, $2, $2, $3, $2, $2, $3, $2, $2, $3, $2, $2, Composite PMPM $2, $2, $3, $3, ¹ Pooled Claims represents the High Cost Risk Pool (HCRP) claims. It is implemented only in the PD and DD Target Groups for Family Care. Please see capitation rate memorandum for further details on the HCRP. 12/14/2015 Milliman, Inc. Page 2 of 5

31 Exhibit A Summary of 2014 Actual Experience by MCO Nursing Home Level of Care CCI (GSR 8) CCI (GSR 10) CCI (GSR 11) ContinuUs (GSR 1) DD PD FE DD PD FE DD PD FE DD PD FE Exposure Months 10,259 8,658 3,332 10,067 3,288 5,168 12,991 6,777 5,812 12,625 8,216 8,242 State Plan Services Adaptive Equipment $54.04 $ $62.83 $29.44 $85.14 $36.13 $36.82 $89.34 $46.16 $36.05 $93.48 $46.31 Adult Day Activities Case Management Habilitation/Health Home Care , Home Health Care Housing Institutional Other Residential Care 1, , , , , , , Respite Care Transportation Vocational Total State Plan Services $3, $2, $2, $3, $2, $2, $3, $2, $2, $3, $2, $2, Room and Board Room and Board Collections (274.51) (89.16) (232.70) (284.47) (233.69) (432.57) (390.55) (171.89) (410.40) (354.97) (173.96) (368.32) Room and Board Costs Total Room and Board $6.74 $22.57 $33.40 $9.83 $46.95 $96.29 $2.34 $19.58 $55.42 $26.43 $25.12 $54.63 Total Pooled Claims ($) ¹ Total Pooled Claims (%) ¹ 0.2% 0.0% 0.0% 0.6% 0.0% 0.0% 0.3% 0.4% 0.0% 0.4% 0.0% 0.0% Grand Total $3, $2, $2, $3, $2, $2, $3, $2, $2, $3, $2, $2, Composite PMPM $3, $2, $3, $3, ¹ Pooled Claims represents the High Cost Risk Pool (HCRP) claims. It is implemented only in the PD and DD Target Groups for Family Care. Please see capitation rate memorandum for further details on the HCRP. 12/14/2015 Milliman, Inc. Page 3 of 5

32 Exhibit A Summary of 2014 Actual Experience by MCO Nursing Home Level of Care ContinuUs (GSR 3) LCD (GSR 9) MCDFC (GSR 8) MCDFC (GSR 11) DD PD FE DD PD FE DD PD FE DD PD FE Exposure Months 11,140 7,163 6,608 14,049 9,953 6,463 22,596 43,199 28, State Plan Services Adaptive Equipment $33.63 $ $46.56 $41.28 $83.15 $44.41 $50.16 $67.17 $55.05 $66.21 $97.20 $72.41 Adult Day Activities Case Management Habilitation/Health Home Care Home Health Care Housing Institutional Other Residential Care 1, , , , , , , Respite Care Transportation Vocational Total State Plan Services $2, $2, $2, $3, $2, $2, $3, $2, $2, $3, $2, $2, Room and Board Room and Board Collections (275.06) (126.81) (278.43) (282.19) (209.50) (370.94) (271.45) (120.46) (226.24) (363.95) (120.92) (279.45) Room and Board Costs Total Room and Board $6.61 $15.86 $51.78 $7.25 $27.79 $ $4.04 -$ $42.42 $13.72 $26.27 $45.00 Total Pooled Claims ($) ¹ Total Pooled Claims (%) ¹ 0.1% 0.0% 0.0% 1.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Grand Total $2, $2, $2, $3, $2, $2, $3, $2, $2, $3, $2, $2, Composite PMPM $2, $2, $2, $2, ¹ Pooled Claims represents the High Cost Risk Pool (HCRP) claims. It is implemented only in the PD and DD Target Groups for Family Care. Please see capitation rate memorandum for further details on the HCRP. 12/14/2015 Milliman, Inc. Page 4 of 5

33 Exhibit A Summary of 2014 Actual Experience by MCO Nursing Home Level of Care WWC (GSR 2) Grand Total - Base Data DD PD FE DD PD FE Exposure Months 17,335 14,716 12, , , ,138 State Plan Services Adaptive Equipment $50.59 $89.35 $52.07 $41.22 $85.68 $51.66 Adult Day Activities Case Management Habilitation/Health Home Care Home Health Care Housing Institutional Other Residential Care 1, , , Respite Care Transportation Vocational Total State Plan Services $3, $1, $2, $3, $2, $2, Room and Board Room and Board Collections (322.99) (87.74) (175.67) (300.81) (142.29) (323.26) Room and Board Costs Total Room and Board $20.14 $12.73 $24.66 $8.76 $13.06 $30.45 Total Pooled Claims ($) ¹ Total Pooled Claims (%) ¹ 0.2% 0.0% 0.0% 0.6% 0.1% 0.0% Grand Total $3, $1, $2, $3, $2, $2, Composite PMPM $2, $2, ¹ Pooled Claims represents the High Cost Risk Pool (HCRP) claims. It is implemented only in the PD and DD Target Groups for Family Care. Please see capitation rate memorandum for further details on the HCRP. 12/14/2015 Milliman, Inc. Page 5 of 5

34 Exhibit B 2014 Statewide Base Rate Development Nursing Home Level of Care DD DD IBNR 2014 Statewide DD Development CY 2014 Base Pooled Claims for Net Base Costs PMPM Adjustment Completed Net Base Exposure Months Experience PMPM HCRP Costs PMPM Care WI (GSR 2) 518 $2, $2, $2, Care WI (GSR 5) 15,407 3, (74.57) 3, , Care WI (GSR 5-6) 8,955 3, (41.56) 3, , Care WI (GSR 6) 293 4, , , CCCW (GSR 4) 18,327 3, (15.59) 3, , CCCW (GSR 7) 10,760 3, (13.56) 3, , CCI (GSR 5-6) 6,474 3, (60.39) 3, , CCI (GSR 6) 11,360 3, (42.30) 3, , CCI (GSR 8) 10,259 3, (8.69) 3, , CCI (GSR 10) 10,067 3, (20.34) 3, , CCI (GSR 11) 12,991 3, (10.34) 3, , ContinuUs (GSR 1) 12,625 3, (14.57) 3, , ContinuUs (GSR 3) 11,140 2, (2.07) 2, , LCD (GSR 9) 14,049 3, (36.75) 3, , MCDFC (GSR 8) 22,596 3, , , MCDFC (GSR 11) 562 3, , , WWC (GSR 2) 17,335 3, (6.16) 3, , Total DD Base Experience Data 183,718 $3, ($22.22) $3, $3, PD PD IBNR 2014 Statewide PD Development CY 2014 Base Pooled Claims for Net Base Costs PMPM Adjustment Completed Net Base Exposure Months Experience PMPM HCRP Costs PMPM Care WI (GSR 2) 671 $1, $1, $1, Care WI (GSR 5) 5,659 2, (15.35) 2, , Care WI (GSR 5-6) 3,299 2, (18.07) 2, , Care WI (GSR 6) 382 2, , , CCCW (GSR 4) 8,861 2, , , CCCW (GSR 7) 6,079 2, (30.23) 2, , CCI (GSR 5-6) 2,681 2, , , CCI (GSR 6) 4,177 2, (6.80) 2, , CCI (GSR 8) 8,658 2, , , CCI (GSR 10) 3,288 2, , , CCI (GSR 11) 6,777 2, (10.45) 2, , ContinuUs (GSR 1) 8,216 2, , , ContinuUs (GSR 3) 7,163 2, , , LCD (GSR 9) 9,953 2, , , MCDFC (GSR 8) 43,199 2, (0.31) 2, , MCDFC (GSR 11) 777 2, , , WWC (GSR 2) 14,716 1, , , Total PD Base Experience Data 134,555 $2, ($3.29) $2, $2, /14/2015 Milliman, Inc. Page 1 of 2

35 Exhibit B 2014 Statewide Base Rate Development Nursing Home Level of Care FE FE IBNR 2014 Statewide FE Development CY 2014 Base Pooled Claims for Net Base Costs PMPM Adjustment Completed Net Base Exposure Months Experience PMPM HCRP Costs PMPM Care WI (GSR 2) 351 $1, $0.00 $1, $1, Care WI (GSR 5) 5,580 2, , , Care WI (GSR 5-6) 5,382 2, , , Care WI (GSR 6) 556 2, , , CCCW (GSR 4) 12,422 2, , , CCCW (GSR 7) 7,585 2, , , CCI (GSR 5-6) 3,804 2, , , CCI (GSR 6) 6,312 2, , , CCI (GSR 8) 3,332 2, , , CCI (GSR 10) 5,168 2, , , CCI (GSR 11) 5,812 2, , , ContinuUs (GSR 1) 8,242 2, , , ContinuUs (GSR 3) 6,608 2, , , LCD (GSR 9) 6,463 2, , , MCDFC (GSR 8) 28,809 2, , , MCDFC (GSR 11) 445 2, , , WWC (GSR 2) 12,266 2, , , Total FE Base Experience Data 119,138 $2, $0.00 $2, $2, Composite Exposure Months Statewide IBNR 2014 Statewide Pooled Claims for HCRP CY 2014 Base Experience PMPM Net Base Costs PMPM Adjustment Completed Net Base Costs PMPM Care WI (GSR 2) 1,539 $1, $1, $2, Care WI (GSR 5) 26,646 3, (46.38) 3, , Care WI (GSR 5-6) 17,636 3, (24.48) 3, , Care WI (GSR 6) 1,231 3, , , CCCW (GSR 4) 39,611 2, (7.22) 2, , CCCW (GSR 7) 24,425 2, (13.50) 2, , CCI (GSR 5-6) 12,959 3, (30.17) 3, , CCI (GSR 6) 21,849 3, (23.29) 3, , CCI (GSR 8) 22,250 3, (4.01) 3, , CCI (GSR 10) 18,524 2, (11.06) 2, , CCI (GSR 11) 25,580 3, (8.02) 3, , ContinuUs (GSR 1) 29,083 3, (6.33) 3, , ContinuUs (GSR 3) 24,911 2, (0.93) 2, , LCD (GSR 9) 30,466 2, (16.95) 2, , MCDFC (GSR 8) 94,603 2, (0.14) 2, , MCDFC (GSR 11) 1,784 2, , , WWC (GSR 2) 44,316 2, (2.41) 2, , Total Base Experience Data 437,411 $2, ($10.35) $2, $2, /14/2015 Milliman, Inc. Page 2 of 2

36 Exhibit C1 Functional Screen Regression Model of PMPM Developmentally Disabled R-Squared 56.2% Statewide Incremental Proportion Incremental Variable Estimate p-value Partial R 2 with Variable Increase Intercept (Grid Component) % - DD/NH Level of Care (Grid Component) Vent Dependent 6, < % 3.34 DD1A < % 8.42 DD < % Dual Enrollee < % Restrictive Measures 1, < % High Cost (5 Parameters) < % 8.40 Number of IADLs (Grid Component) IADL_ < % IADL_ < % IADL_ < % Specific ADLs / Equipment Used (Add-On) Eating_ < % Toileting_ < % Transfer_ < % Interaction Terms (Add-On) Dress_Bath_Equip < % Transfer_Equip_Mobility < % Mental Retardation_Bipolar < % Mental Retardation_Other Mental Illness < % Seizure Pre-22_Depression < % Other Federal DD_Bipolar < % 2.71 Injury_Overnight < % Injury_Mental Illness_Age Under 30 1, < % 8.35 Behaviors_Autism < % 8.23 Trauma BI Post-22_Depression < % Muscular_Mental Illness_Age 60 and Under < % 4.83 Overnight_Age Under < % Overnight_Mental Illness < % Overnight_Mental Illness_Age Under 30 1, < % Restrictive Measures_Autism 2, < % Behavioral Variables (Add-On) Cognition_ < % Injury_ < % Injury_ < % Mental Health_ < % Offensive_ < % Offensive_2 1, < % Offensive_3 2, < % Alcohol Drug Abuse < % 4.30 Wander_ < % Medication Use (Add-On) Meds_2B < % Health Related Services (Add-On) Exercise < % Ostomy < % 2.85 Overnight < % Reposition < % Respirate < % Tracheostomy 1, < % 3.57 Tube Feedings < % 7.20 Urinary < % 5.19 Diagnoses (Add-On) Brain Injury Pre < % 7.39 Mental Retardation < % /14/2015 Milliman Page 1 of 1

37 Exhibit C2 Functional Screen Regression Model of PMPM Physically Disabled R-Squared 46.4% Statewide Incremental Proportion Incremental Variable Estimate p-value Partial R 2 with Variable Increase Intercept (Grid Component) % DD/NH Level of Care (Grid Component) Vent Dependent 5, < % SNF < % Number of IADLs (Grid Component) IADL_ < % IADL_ < % IADL_ < % IADL_ < % IADL_6 1, < % Specific ADLs / Equipment Used (Add-On) Bathing_ < % Bathing_ < % Toileting_ < % Transfer_ < % Interaction Terms (Add-On) Dress_Bath_Equip < % Dress_Toilet < % Transfer_Equip_Mobility < % Trauma BI Post-22_Alcohol/Drug Abuse < % 2.23 Trauma BI Post-22_Exercise 1, < % 1.45 Trauma BI Post-22_Other Mental Illness < % 3.97 Disabled_Employment Assistance < % Overnight_Mental Illness < % Overnight_Age Under < % 1.69 Mental Illness_3 or More Mental Disorders < % Injury_Overnight_Mental Illness 1, < % 2.48 Spinal Injury_Alcohol/Drug Abuse < % 2.70 Behavioral Variables (Add-On) Cognition_ < % Mental Health_ < % Offensive_ < % Offensive_ < % Offensive_3 1, < % Alcohol Drug Abuse < % Wander_ < % 1.64 Medication Use (Add-On) Meds_2B < % Health Related Services (Add-On) Exercise < % Overnight < % Reposition < % Respirate < % Tracheostomy 3, < % Ulcer Stage < % 5.23 Ulcer Stage < % 8.50 Urinary < % 7.54 Diagnoses (Add-On) Alzheimers < % /14/2015 Milliman Page 1 of 1

38 Exhibit C3 Functional Screen Regression Model of PMPM Frail Elderly R-Squared 38.9% Statewide Incremental Proportion Incremental Variable Estimate p-value Partial R 2 with Variable Increase Intercept (Grid Component) % DD/NH Level of Care (Grid Component) Vent Dependent % 0.25 SNF < % Number of IADLs (Grid Component) IADL_ < % 6.82 IADL_ < % IADL_ < % Specific ADLs / Equipment Used (Add-On) Bathing_ < % Bathing_ < % Toileting_ < % Toileting_ < % Transfer_ < % Interaction Terms (Add-On) Bath_Equip_Eat < % Transfer_Equip_Mobility < % Seizure Post-22_Schizophrenia < % 1.60 Injury_Overnight 1, < % 1.37 Behavioral Variables (Add-On) Mental Health_ < % Offensive_ < % 7.92 Offensive_ < % 6.14 Offensive_ < % 1.42 Alcohol Drug Abuse < % 9.19 Wander_ < % 4.97 Health Related Services (Add-On) Exercise < % Med Management < % Overnight < % Reposition < % Respirate < % 7.21 Tube Feedings < % 2.36 Ulcer Stage < % 3.49 Diagnoses (Add-On) Alzheimers < % Mental Illness < % /14/2015 Milliman Page 1of 1

39 Exhibit D1Ai 2014 Base Population MCO / GSR Functional Screen Attribute Distribution Developmentally Disabled Variable Statewide Estimate Care WI (GSR 2) Care WI (GSR 5) Care WI (GSR 5-6) Care WI (GSR 6) CCCW (GSR 4) CCCW (GSR 7) CCI (GSR 5-6) CCI (GSR 6) Intercept (Grid Component) % % % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent 6, % 0.13% 0.07% 0.00% 0.03% 0.01% 0.00% 0.00% DD1A % 3.09% 1.80% 1.36% 2.86% 2.37% 1.39% 2.26% DD % 56.43% 55.72% 47.93% 62.10% 62.65% 57.47% 60.80% Dual Enrollee % 75.36% 72.14% 47.86% 73.58% 74.30% 72.21% 76.03% Restrictive Measures 1, % 2.61% 1.80% 4.09% 1.24% 2.70% 4.45% 1.51% High Cost (5 Parameters) % 1.42% 2.80% 4.09% 1.20% 1.70% 2.15% 1.39% Number of IADLs (Grid Component) IADL_ % 16.63% 13.01% 16.08% 25.33% 25.74% 15.73% 25.24% IADL_ % 15.25% 15.51% 21.59% 16.43% 18.40% 16.41% 18.98% IADL_ % 67.97% 71.41% 62.33% 58.15% 55.86% 67.86% 55.67% Specific ADLs / Equipment Used (Add-On) Eating_ % 26.84% 25.93% 23.15% 22.85% 23.48% 20.49% 18.03% Toileting_ % 27.62% 25.90% 21.30% 19.32% 22.72% 18.50% 16.06% Transfer_ % 23.91% 20.09% 15.54% 18.52% 19.05% 15.23% 17.40% Interaction Terms (Add-On) Dress_Bath_Equip % 45.50% 41.19% 41.00% 35.74% 37.05% 35.34% 35.21% Transfer_Equip_Mobility % 6.15% 5.61% 0.68% 4.99% 3.39% 4.27% 3.41% Mental Retardation_Bipolar % 7.09% 4.34% 15.22% 4.35% 4.63% 3.56% 4.07% Mental Retardation_Other Mental Illness % 13.94% 14.59% 10.85% 14.69% 17.70% 16.46% 16.46% Seizure Pre-22_Depression % 6.11% 5.06% 1.07% 5.33% 6.47% 5.71% 4.56% Other Federal DD_Bipolar % 1.01% 1.33% 6.93% 1.30% 0.99% 1.54% 0.54% Injury_Overnight % 3.28% 4.94% 4.77% 2.58% 3.27% 6.86% 3.78% Injury_Mental Illness_Age Under 30 1, % 0.67% 1.60% 3.69% 0.31% 0.66% 0.59% 0.97% Behaviors_Autism % 3.97% 6.54% 4.57% 2.80% 1.92% 7.94% 3.72% Trauma BI Post-22_Depression % 2.18% 3.22% 3.75% 1.37% 2.96% 1.44% 1.91% Muscular_Mental Illness_Age 60 and Under % 1.79% 1.85% 0.00% 2.50% 2.89% 1.87% 1.62% Overnight_Age Under % 5.11% 5.82% 7.16% 5.28% 4.90% 6.46% 5.06% Overnight_Mental Illness % 9.85% 8.91% 20.83% 6.24% 10.30% 6.02% 5.82% Overnight_Mental Illness_Age Under 30 1, % 2.05% 1.97% 5.11% 1.56% 2.44% 1.77% 1.90% Restrictive Measures_Autism 2, % 0.59% 0.40% 4.09% 0.79% 0.65% 0.93% 0.75% Behavioral Variables (Add-On) Cognition_ % 29.73% 32.90% 30.58% 23.45% 22.76% 34.56% 21.54% Injury_ % 7.87% 10.21% 8.62% 2.91% 3.55% 3.88% 2.32% Injury_ % 8.71% 7.90% 5.11% 4.54% 5.39% 4.91% 4.57% Mental Health_ % 54.58% 53.04% 69.42% 51.14% 55.60% 45.32% 49.12% Offensive_ % 14.88% 14.97% 12.32% 8.52% 10.73% 5.84% 4.35% Offensive_2 1, % 16.18% 13.46% 7.36% 8.41% 9.41% 12.35% 7.30% Offensive_3 2, % 8.76% 12.45% 22.50% 7.65% 7.53% 17.40% 12.26% Alcohol Drug Abuse % 3.04% 2.40% 0.80% 2.79% 4.28% 2.19% 2.36% Wander_ % 3.04% 4.47% 9.17% 3.88% 3.65% 4.88% 2.56% Medication Use (Add-On) Meds_2B % 68.36% 66.95% 68.63% 54.21% 64.49% 71.18% 66.65% Health Related Services (Add-On) Exercise % 22.85% 24.55% 9.52% 14.36% 12.73% 12.03% 8.61% Ostomy % 0.34% 0.18% 1.89% 0.77% 0.72% 0.37% 0.32% Overnight % 78.67% 80.82% 76.31% 64.66% 69.66% 78.97% 68.54% Reposition % 7.81% 7.19% 0.00% 8.01% 5.85% 7.28% 5.92% Respirate % 4.45% 4.47% 4.09% 4.86% 5.09% 3.58% 4.57% Tracheostomy 1, % 0.15% 0.28% 0.00% 0.36% 0.25% 0.00% 0.11% Tube Feedings % 2.52% 2.13% 0.00% 2.09% 1.88% 1.95% 1.70% Urinary % 1.06% 1.05% 0.00% 1.01% 0.60% 1.00% 1.07% Diagnoses (Add-On) Brain Injury Pre % 4.83% 7.39% 0.00% 4.72% 5.72% 4.73% 5.19% Mental Retardation % 78.84% 66.44% 77.12% 75.74% 65.22% 72.83% 75.15% Developmentally Disabled Base Composite $3, $2, $3, $3, $4, $3, $3, $3, $3, Implied Risk Score Exposure Months ,407 8, ,327 10,760 6,474 11,360 12/14/2015 Milliman, Inc. Page 1 of 4

40 Exhibit D1Aii 2014 Base Population MCO/GSR Functional Screen Attribute Distribution Developmentally Disabled Variable Statewide Estimate CCI (GSR 8) CCI (GSR 10) CCI (GSR 11) ContinuUs (GSR 1) ContinuUs (GSR 3) LCD (GSR 9) MCDFC (GSR 8) MCDFC (GSR 11) WWC (GSR 2) Intercept (Grid Component) % % % % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent 6, % 0.14% 0.21% 0.00% 0.00% 0.00% 0.05% 0.00% 0.02% DD1A % 2.15% 2.79% 3.21% 2.45% 3.19% 4.15% 4.41% 4.22% DD % 57.05% 61.26% 61.04% 66.67% 68.02% 71.14% 59.30% 58.28% Dual Enrollee % 73.16% 69.53% 75.45% 74.45% 74.12% 70.25% 54.18% 72.72% Restrictive Measures 1, % 1.87% 1.46% 2.25% 1.50% 1.85% 1.73% 3.55% 2.65% High Cost (5 Parameters) % 1.84% 1.21% 1.28% 0.79% 0.90% 0.71% 1.41% 1.20% Number of IADLs (Grid Component) IADL_ % 26.58% 16.03% 22.14% 27.56% 17.97% 15.42% 11.38% 21.68% IADL_ % 19.53% 17.84% 17.05% 15.96% 16.75% 16.52% 16.43% 17.75% IADL_ % 53.89% 66.13% 60.66% 56.15% 65.24% 68.03% 72.19% 60.48% Specific ADLs / Equipment Used (Add-On) Eating_ % 19.52% 20.51% 22.53% 18.00% 20.42% 16.25% 17.61% 20.50% Toileting_ % 13.40% 19.41% 23.43% 21.03% 19.72% 22.81% 23.60% 21.40% Transfer_ % 15.97% 19.36% 19.48% 19.87% 17.14% 21.62% 32.66% 20.50% Interaction Terms (Add-On) Dress_Bath_Equip % 34.92% 38.01% 42.63% 32.81% 37.13% 40.62% 38.10% 37.64% Transfer_Equip_Mobility % 4.05% 4.51% 4.95% 4.36% 5.60% 5.59% 9.07% 5.93% Mental Retardation_Bipolar % 5.30% 5.75% 5.00% 5.13% 5.65% 5.61% 9.39% 4.33% Mental Retardation_Other Mental Illness % 14.99% 13.87% 20.14% 15.01% 15.85% 19.93% 7.70% 14.62% Seizure Pre-22_Depression % 5.25% 3.12% 6.75% 6.14% 7.34% 5.42% 8.84% 5.29% Other Federal DD_Bipolar % 0.94% 1.00% 1.94% 1.37% 0.32% 0.68% 0.18% 0.75% Injury_Overnight % 5.28% 5.45% 3.52% 1.19% 2.33% 1.87% 0.00% 3.91% Injury_Mental Illness_Age Under 30 1, % 0.36% 0.61% 0.08% 0.11% 0.36% 0.30% 0.00% 0.38% Behaviors_Autism % 5.97% 4.69% 3.06% 2.40% 2.43% 2.30% 1.59% 5.02% Trauma BI Post-22_Depression % 1.39% 2.64% 1.07% 0.76% 0.99% 1.88% 7.18% 0.73% Muscular_Mental Illness_Age 60 and Under % 2.67% 1.62% 3.76% 2.34% 2.12% 2.60% 0.00% 3.27% Overnight_Age Under % 4.30% 4.61% 4.15% 4.22% 4.55% 3.26% 5.16% 5.31% Overnight_Mental Illness % 6.81% 5.08% 7.02% 5.33% 5.82% 8.79% 11.91% 5.68% Overnight_Mental Illness_Age Under 30 1, % 1.00% 1.12% 0.90% 0.97% 0.90% 1.17% 2.13% 1.30% Restrictive Measures_Autism 2, % 0.36% 0.48% 0.91% 0.53% 0.70% 0.21% 1.41% 0.84% Behavioral Variables (Add-On) Cognition_ % 19.72% 25.17% 25.99% 27.72% 20.25% 29.69% 32.55% 29.36% Injury_ % 4.99% 4.60% 8.40% 9.01% 7.42% 6.06% 4.43% 5.91% Injury_ % 6.09% 4.59% 7.52% 4.03% 5.82% 3.47% 2.32% 6.13% Mental Health_ % 53.08% 42.75% 60.64% 52.35% 49.88% 49.51% 58.41% 52.81% Offensive_ % 7.57% 6.38% 14.67% 16.05% 13.85% 10.30% 11.42% 10.01% Offensive_2 1, % 8.82% 7.73% 13.88% 9.23% 10.38% 6.50% 11.64% 12.58% Offensive_3 2, % 15.55% 12.17% 6.01% 4.33% 4.71% 4.68% 5.52% 9.34% Alcohol Drug Abuse % 2.79% 4.44% 4.42% 3.39% 2.15% 3.03% 2.67% 5.62% Wander_ % 3.85% 3.66% 5.44% 3.77% 2.19% 3.25% 4.45% 4.63% Medication Use (Add-On) Meds_2B % 64.77% 75.52% 62.14% 52.23% 59.52% 69.22% 67.36% 65.82% Health Related Services (Add-On) Exercise % 8.14% 7.29% 16.79% 11.23% 11.20% 7.17% 11.38% 16.26% Ostomy % 0.44% 0.34% 0.81% 0.48% 0.75% 0.78% 0.00% 0.86% Overnight % 68.37% 74.45% 69.53% 64.98% 75.39% 70.83% 79.89% 70.42% Reposition % 4.85% 6.24% 6.28% 5.70% 5.23% 7.88% 13.87% 6.56% Respirate % 4.09% 3.59% 8.71% 4.66% 5.26% 3.59% 6.01% 7.06% Tracheostomy 1, % 0.08% 0.43% 0.17% 0.11% 0.23% 0.13% 0.00% 0.37% Tube Feedings % 1.79% 2.92% 1.90% 1.66% 2.06% 2.86% 6.93% 2.44% Urinary % 0.70% 0.65% 0.69% 0.58% 0.48% 0.79% 0.00% 1.15% Diagnoses (Add-On) Brain Injury Pre % 6.73% 5.80% 7.60% 5.17% 3.49% 5.58% 2.85% 5.29% Mental Retardation % 71.46% 67.98% 65.48% 75.97% 86.31% 80.60% 53.75% 78.81% Developmentally Disabled Base Composite $3, $3, $3, $3, $3, $3, $3, $3, $3, $3, Implied Risk Score Exposure Months 10,259 10,067 12,991 12,625 11,140 14,049 22, ,335 12/14/2015 Milliman, Inc. Page 2 of 4

41 Exhibit D1Aiii 2014 Non-Base Population MCO/GSR Functional Screen Attribute Distribution Developmentally Disabled Variable Statewide Estimate CCI (GSR 9) ContinuUs (GSR 5) ContinuUs (GSR 5-6) LCD (GSR 10) MCDFC (GSR 5-6) MCDFC (GSR 6) Intercept (Grid Component) % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent 6, % 0.00% 0.00% 0.14% 0.00% 0.00% DD1A % 0.60% 0.00% 2.15% 0.00% 0.00% DD % 57.55% 0.00% 57.05% 60.65% 49.56% Dual Enrollee % 60.63% 0.00% 73.16% % 66.96% Restrictive Measures 1, % 0.00% 0.00% 1.87% 0.00% 0.00% High Cost (5 Parameters) % 6.86% 0.00% 1.84% 0.00% 0.00% Number of IADLs (Grid Component) IADL_ % 21.13% 0.00% 26.58% 17.77% 33.04% IADL_ % 26.27% 0.00% 19.53% 26.18% 36.67% IADL_ % 52.60% % 53.89% 56.09% 30.29% Specific ADLs / Equipment Used (Add-On) Eating_ % 23.15% 0.00% 19.52% 0.00% 0.00% Toileting_ % 23.74% 28.57% 13.40% 5.92% 0.00% Transfer_ % 26.73% 0.00% 15.97% 12.70% 0.00% Interaction Terms (Add-On) Dress_Bath_Equip % 36.88% 0.00% 34.92% 11.16% 0.00% Transfer_Equip_Mobility % 8.53% 0.00% 4.05% 0.00% 0.00% Mental Retardation_Bipolar % 2.58% 0.00% 5.30% 0.00% 0.00% Mental Retardation_Other Mental Illness % 27.02% 0.00% 14.99% 0.00% 0.00% Seizure Pre-22_Depression % 6.85% 0.00% 5.25% 1.42% 0.00% Other Federal DD_Bipolar % 0.00% 0.00% 0.94% 26.65% 0.00% Injury_Overnight % 9.24% 0.00% 5.28% 0.00% 0.00% Injury_Mental Illness_Age Under 30 1, % 6.86% 0.00% 0.36% 0.00% 0.00% Behaviors_Autism % 0.00% 0.00% 5.97% 0.00% 0.00% Trauma BI Post-22_Depression % 1.37% 0.00% 1.39% 33.43% 0.00% Muscular_Mental Illness_Age 60 and Under % 6.86% 0.00% 2.67% 0.00% 0.00% Overnight_Age Under % 9.44% 28.57% 4.30% 0.00% 0.00% Overnight_Mental Illness % 10.63% 0.00% 6.81% 0.00% 0.00% Overnight_Mental Illness_Age Under 30 1, % 9.44% 0.00% 1.00% 0.00% 0.00% Restrictive Measures_Autism 2, % 0.00% 0.00% 0.36% 0.00% 0.00% Behavioral Variables (Add-On) Cognition_ % 29.76% % 19.72% 0.00% 0.00% Injury_ % 11.21% 0.00% 4.99% 0.00% 0.00% Injury_ % 8.40% % 6.09% 11.84% 0.00% Mental Health_ % 57.52% 0.00% 53.08% 37.81% 13.77% Offensive_ % 12.19% 0.00% 7.57% 14.81% 0.00% Offensive_2 1, % 10.32% 0.00% 8.82% 14.81% 0.00% Offensive_3 2, % 12.23% 0.00% 15.55% 0.00% 0.00% Alcohol Drug Abuse % 7.57% 0.00% 2.79% 26.65% 0.00% Wander_ % 6.86% 0.00% 3.85% 0.00% 0.00% Medication Use (Add-On) Meds_2B % 57.91% % 64.77% 77.94% 61.45% Health Related Services (Add-On) Exercise % 29.12% 0.00% 8.14% 5.92% 0.00% Ostomy % 0.00% 0.00% 0.44% 0.00% 0.00% Overnight % 54.33% % 68.37% 44.24% 35.79% Reposition % 10.92% 0.00% 4.85% 0.00% 0.00% Respirate % 8.26% 0.00% 4.09% 20.73% 0.00% Tracheostomy 1, % 0.00% 0.00% 0.08% 0.00% 0.00% Tube Feedings % 0.00% 0.00% 1.79% 0.00% 0.00% Urinary % 0.00% 0.00% 0.70% 0.00% 0.00% Diagnoses (Add-On) Brain Injury Pre % 1.39% 0.00% 6.73% 23.69% 31.17% Mental Retardation % 69.00% % 71.46% 39.92% 35.79% Developmentally Disabled Base Composite $3, $3, $3, $3, $3, $2, $1, Implied Risk Score Exposure Months /14/2015 Milliman, Inc. Page 3 of 4

42 Exhibit D1Aiv 2015 Expansion Population MCO/GSR Functional Screen Attribute Distribution Developmentally Disabled Variable Statewide Estimate Care WI (GSR 13) LCD (GSR 13) Intercept (Grid Component) % % DD/NH Level of Care (Grid Component) Vent Dependent 6, % 0.16% DD1A % 3.71% DD % 75.46% Dual Enrollee % 64.84% Restrictive Measures 1, % 1.79% High Cost (5 Parameters) % 0.22% Number of IADLs (Grid Component) IADL_ % 23.85% IADL_ % 20.85% IADL_ % 55.14% Specific ADLs / Equipment Used (Add-On) Eating_ % 22.58% Toileting_ % 21.18% Transfer_ % 19.80% Interaction Terms (Add-On) Dress_Bath_Equip % 28.83% Transfer_Equip_Mobility % 5.20% Mental Retardation_Bipolar % 3.66% Mental Retardation_Other Mental Illness % 12.26% Seizure Pre-22_Depression % 3.68% Other Federal DD_Bipolar % 0.74% Injury_Overnight % 0.57% Injury_Mental Illness_Age Under 30 1, % 0.00% Behaviors_Autism % 0.87% Trauma BI Post-22_Depression % 1.00% Muscular_Mental Illness_Age 60 and Under % 1.04% Overnight_Age Under % 3.96% Overnight_Mental Illness % 2.66% Overnight_Mental Illness_Age Under 30 1, % 0.43% Restrictive Measures_Autism 2, % 0.47% Behavioral Variables (Add-On) Cognition_ % 23.50% Injury_ % 9.23% Injury_ % 3.35% Mental Health_ % 34.80% Offensive_ % 18.89% Offensive_2 1, % 5.03% Offensive_3 2, % 1.60% Alcohol Drug Abuse % 1.65% Wander_ % 1.62% Medication Use (Add-On) Meds_2B % 49.02% Health Related Services (Add-On) Exercise % 10.50% Ostomy % 0.45% Overnight % 65.48% Reposition % 6.32% Respirate % 3.69% Tracheostomy 1, % 0.21% Tube Feedings % 3.03% Urinary % 1.07% Diagnoses (Add-On) Brain Injury Pre % 4.30% Mental Retardation % 78.01% Developmentally Disabled Base Composite $3, $2, $2, Implied Risk Score Exposure Months /14/2015 Milliman, Inc. Page 4 of 4

43 Exhibit D1Bi June 2015 Base Population MCO / GSR Functional Screen Attribute Distribution Developmentally Disabled Variable Statewide Estimate Care WI (GSR 2) Care WI (GSR 5) Care WI (GSR 5-6) Care WI (GSR 6) CCCW (GSR 4) CCCW (GSR 7) CCI (GSR 5-6) CCI (GSR 6) Intercept (Grid Component) % % % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent 6, % 0.08% 0.00% 0.00% 0.07% 0.00% 0.00% 0.00% DD1A % 3.01% 1.63% 1.99% 3.20% 3.16% 1.94% 1.88% DD % 59.17% 57.49% 61.60% 61.56% 60.92% 56.37% 62.05% Dual Enrollee % 75.68% 72.89% 74.86% 73.61% 74.81% 71.26% 75.74% Restrictive Measures 1, % 2.66% 1.91% 1.69% 1.77% 2.51% 4.76% 1.67% High Cost (5 Parameters) % 1.65% 2.86% 1.49% 1.44% 1.96% 2.12% 1.46% Number of IADLs (Grid Component) IADL_ % 17.22% 13.62% 22.59% 26.46% 24.83% 12.91% 22.73% IADL_ % 14.36% 15.67% 20.10% 15.92% 20.83% 15.87% 19.71% IADL_ % 68.35% 70.71% 57.21% 57.56% 54.34% 71.22% 57.45% Specific ADLs / Equipment Used (Add-On) Eating_ % 26.17% 24.93% 19.05% 24.18% 25.16% 21.87% 18.92% Toileting_ % 27.45% 26.16% 17.86% 19.03% 21.79% 20.98% 18.09% Transfer_ % 23.62% 20.57% 17.66% 19.36% 19.28% 16.58% 17.98% Interaction Terms (Add-On) Dress_Bath_Equip % 45.39% 42.64% 36.77% 35.17% 39.16% 37.29% 36.97% Transfer_Equip_Mobility % 5.95% 5.59% 3.42% 4.81% 3.67% 5.29% 3.48% Mental Retardation_Bipolar % 7.23% 4.36% 4.38% 4.13% 5.45% 3.17% 4.07% Mental Retardation_Other Mental Illness % 13.93% 14.44% 16.21% 14.88% 18.30% 15.89% 16.05% Seizure Pre-22_Depression % 6.27% 5.45% 4.27% 5.44% 7.30% 6.00% 4.47% Other Federal DD_Bipolar % 1.41% 1.50% 0.90% 1.83% 1.42% 1.94% 0.73% Injury_Overnight % 2.98% 4.63% 3.88% 2.88% 3.81% 6.35% 3.97% Injury_Mental Illness_Age Under 30 1, % 0.63% 1.36% 0.90% 0.39% 0.76% 0.71% 0.94% Behaviors_Autism % 4.00% 5.99% 4.08% 2.49% 2.18% 7.41% 4.17% Trauma BI Post-22_Depression % 2.35% 3.41% 2.29% 1.38% 3.49% 1.41% 2.30% Muscular_Mental Illness_Age 60 and Under % 2.04% 1.91% 2.09% 2.82% 3.81% 2.59% 2.09% Overnight_Age Under % 4.86% 6.27% 5.65% 4.96% 4.58% 5.82% 5.29% Overnight_Mental Illness % 10.81% 8.99% 7.97% 6.68% 11.33% 6.52% 7.00% Overnight_Mental Illness_Age Under 30 1, % 2.04% 2.04% 2.56% 1.57% 2.61% 1.76% 2.16% Restrictive Measures_Autism 2, % 0.63% 0.41% 0.90% 0.79% 0.44% 1.06% 0.83% Behavioral Variables (Add-On) Cognition_ % 29.22% 32.84% 24.00% 22.94% 23.64% 34.74% 23.90% Injury_ % 7.76% 10.49% 3.48% 2.99% 4.14% 3.70% 3.13% Injury_ % 8.54% 7.08% 3.58% 4.85% 4.25% 5.64% 3.23% Mental Health_ % 55.73% 53.40% 50.94% 51.96% 59.01% 48.16% 50.46% Offensive_ % 15.82% 14.57% 5.89% 7.79% 9.91% 5.29% 5.55% Offensive_2 1, % 14.49% 12.81% 7.97% 9.10% 9.91% 14.36% 7.93% Offensive_3 2, % 8.38% 12.53% 13.26% 7.07% 7.95% 16.58% 12.96% Alcohol Drug Abuse % 2.68% 2.72% 3.09% 2.82% 5.12% 3.00% 2.92% Wander_ % 2.82% 4.63% 3.06% 4.32% 3.27% 4.06% 2.79% Medication Use (Add-On) Meds_2B % 69.09% 67.85% 68.64% 56.82% 67.90% 74.40% 68.59% Health Related Services (Add-On) Exercise % 21.47% 21.39% 8.16% 13.53% 12.96% 11.46% 8.35% Ostomy % 0.55% 0.14% 0.40% 0.79% 0.44% 0.35% 0.42% Overnight % 78.52% 80.93% 72.67% 65.28% 72.31% 78.80% 72.72% Reposition % 7.45% 7.49% 6.21% 7.11% 5.77% 7.76% 6.50% Respirate % 5.36% 4.63% 4.31% 5.34% 5.12% 4.06% 4.42% Tracheostomy 1, % 0.16% 0.27% 0.20% 0.29% 0.22% 0.00% 0.21% Tube Feedings % 2.35% 2.04% 1.59% 2.29% 1.85% 1.94% 1.57% Urinary % 1.21% 1.09% 1.00% 1.05% 1.09% 0.88% 1.04% Diagnoses (Add-On) Brain Injury Pre % 5.33% 8.04% 5.18% 5.27% 7.63% 5.47% 5.11% Mental Retardation % 77.43% 65.80% 73.20% 75.06% 67.32% 66.06% 73.06% Developmentally Disabled Composite $3, $3, $3, $3, $3, $3, $3, $3, $3, /14/2015 Milliman, Inc. Page 1 of 4

44 Exhibit D1Bii June 2015 Base Population MCO/GSR Functional Screen Attribute Distribution Developmentally Disabled Variable Statewide Estimate CCI (GSR 8) CCI (GSR 10) CCI (GSR 11) ContinuUs (GSR 1) ContinuUs (GSR 3) LCD (GSR 9) MCDFC (GSR 8) MCDFC (GSR 11) WWC (GSR 2) Intercept (Grid Component) % % % % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent 6, % 0.12% 0.19% 0.00% 0.00% 0.00% 0.05% 0.18% 0.00% DD1A % 2.23% 2.22% 2.72% 3.04% 3.09% 3.73% 2.19% 3.96% DD % 55.62% 60.92% 60.73% 66.60% 67.61% 68.41% 60.99% 55.89% Dual Enrollee % 74.75% 69.61% 74.69% 74.80% 74.57% 70.07% 68.72% 73.47% Restrictive Measures 1, % 1.92% 1.67% 2.35% 1.60% 1.89% 1.77% 1.66% 2.80% High Cost (5 Parameters) % 2.28% 1.57% 1.88% 0.96% 1.12% 0.99% 1.58% 1.47% Number of IADLs (Grid Component) IADL_ % 25.64% 14.35% 22.01% 27.77% 16.51% 14.10% 14.30% 20.83% IADL_ % 19.41% 17.65% 16.08% 16.42% 16.17% 17.56% 17.62% 17.64% IADL_ % 54.95% 68.00% 61.81% 55.51% 67.23% 68.34% 68.08% 61.39% Specific ADLs / Equipment Used (Add-On) Eating_ % 21.40% 22.92% 25.13% 19.21% 20.88% 17.78% 22.66% 21.78% Toileting_ % 15.03% 20.33% 23.14% 21.65% 19.51% 22.87% 20.56% 21.96% Transfer_ % 16.11% 19.31% 20.51% 20.45% 17.10% 21.83% 19.86% 22.44% Interaction Terms (Add-On) Dress_Bath_Equip % 36.32% 39.62% 43.13% 33.22% 37.38% 42.05% 39.70% 39.34% Transfer_Equip_Mobility % 4.33% 4.96% 4.91% 4.21% 5.67% 5.84% 4.96% 6.27% Mental Retardation_Bipolar % 5.29% 6.29% 5.54% 5.75% 6.03% 5.97% 6.48% 4.20% Mental Retardation_Other Mental Illness % 16.17% 13.33% 21.44% 15.05% 15.29% 19.42% 13.23% 15.04% Seizure Pre-22_Depression % 5.89% 3.42% 6.58% 5.73% 7.99% 5.31% 3.67% 5.82% Other Federal DD_Bipolar % 1.80% 1.30% 1.92% 1.50% 0.86% 0.73% 1.40% 1.30% Injury_Overnight % 5.89% 5.82% 4.89% 1.50% 2.58% 2.55% 5.69% 4.54% Injury_Mental Illness_Age Under 30 1, % 0.36% 0.93% 0.38% 0.11% 0.43% 0.57% 0.88% 0.38% Behaviors_Autism % 6.01% 4.44% 3.59% 2.16% 2.49% 3.28% 4.47% 4.71% Trauma BI Post-22_Depression % 1.80% 3.11% 0.94% 1.28% 1.38% 2.50% 3.38% 2.17% Muscular_Mental Illness_Age 60 and Under % 3.13% 1.85% 4.60% 2.14% 2.06% 2.92% 1.84% 4.22% Overnight_Age Under % 4.45% 5.46% 4.06% 4.77% 4.73% 3.68% 5.52% 5.15% Overnight_Mental Illness % 7.09% 6.01% 7.72% 5.88% 6.96% 9.59% 6.21% 7.06% Overnight_Mental Illness_Age Under 30 1, % 1.08% 1.48% 1.05% 1.18% 1.03% 1.46% 1.40% 1.33% Restrictive Measures_Autism 2, % 0.60% 0.56% 0.94% 0.64% 0.69% 0.21% 0.61% 0.68% Behavioral Variables (Add-On) Cognition_ % 21.88% 24.90% 27.07% 28.30% 20.60% 29.97% 24.80% 29.02% Injury_ % 4.45% 5.74% 8.17% 8.98% 7.23% 5.52% 5.61% 5.87% Injury_ % 6.01% 4.91% 6.22% 4.28% 5.42% 3.91% 4.82% 6.82% Mental Health_ % 55.07% 45.82% 63.95% 56.49% 50.94% 52.32% 47.22% 55.44% Offensive_ % 7.70% 7.50% 11.43% 15.02% 12.63% 9.67% 7.47% 9.34% Offensive_2 1, % 8.18% 10.92% 12.31% 8.88% 10.33% 7.50% 10.99% 12.75% Offensive_3 2, % 17.13% 11.19% 9.79% 4.81% 6.19% 6.72% 11.21% 10.20% Alcohol Drug Abuse % 3.01% 5.15% 4.78% 3.42% 1.77% 3.33% 5.05% 5.72% Wander_ % 3.37% 4.26% 5.82% 3.88% 2.06% 3.68% 4.38% 4.95% Medication Use (Add-On) Meds_2B % 67.63% 77.16% 66.79% 55.15% 61.81% 74.40% 77.27% 66.78% Health Related Services (Add-On) Exercise % 8.78% 8.05% 15.06% 10.10% 10.57% 6.99% 7.89% 17.26% Ostomy % 0.48% 0.19% 0.56% 0.53% 0.69% 0.83% 0.18% 0.89% Overnight % 72.26% 75.78% 72.52% 66.69% 76.87% 76.97% 76.29% 76.40% Reposition % 5.05% 6.44% 5.76% 5.39% 5.50% 7.69% 6.45% 7.23% Respirate % 4.45% 4.07% 7.70% 5.35% 5.76% 4.08% 4.38% 7.80% Tracheostomy 1, % 0.00% 0.28% 0.09% 0.11% 0.26% 0.27% 0.26% 0.48% Tube Feedings % 2.04% 3.20% 2.16% 2.07% 2.15% 2.98% 3.21% 2.54% Urinary % 0.36% 1.02% 0.56% 0.75% 0.60% 0.89% 0.96% 1.02% Diagnoses (Add-On) Brain Injury Pre % 6.97% 5.75% 8.33% 5.86% 4.30% 6.30% 5.80% 6.91% Mental Retardation % 70.72% 66.87% 66.41% 72.46% 84.56% 78.40% 66.37% 76.20% Developmentally Disabled Composite $3, $3, $3, $3, $3, $3, $3, $3, $3, $3, /14/2015 Milliman, Inc. Page 2 of 4

45 Exhibit D1Biii June 2015 Non-Base Population MCO/GSR Functional Screen Attribute Distribution Developmentally Disabled Variable Statewide Estimate CCI (GSR 9) ContinuUs (GSR 5) ContinuUs (GSR 5-6) LCD (GSR 10) MCDFC (GSR 5-6) MCDFC (GSR 6) Intercept (Grid Component) % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent 6, % 0.08% 0.00% 0.12% 0.00% 0.00% DD1A % 2.96% 1.75% 2.23% 1.75% 1.99% DD % 59.09% 56.91% 55.62% 56.91% 61.60% Dual Enrollee % 75.55% 72.26% 74.75% 72.26% 74.86% Restrictive Measures 1, % 2.62% 3.12% 1.92% 3.12% 1.69% High Cost (5 Parameters) % 1.69% 2.52% 2.28% 2.52% 1.49% Number of IADLs (Grid Component) IADL_ % 17.31% 13.43% 25.64% 13.43% 22.59% IADL_ % 14.57% 15.85% 19.41% 15.85% 20.10% IADL_ % 68.04% 70.72% 54.95% 70.72% 57.21% Specific ADLs / Equipment Used (Add-On) Eating_ % 26.03% 23.47% 21.40% 23.47% 19.05% Toileting_ % 27.22% 24.01% 15.03% 24.01% 17.86% Transfer_ % 23.37% 18.75% 16.11% 18.75% 17.66% Interaction Terms (Add-On) Dress_Bath_Equip % 45.01% 40.28% 36.32% 40.28% 36.77% Transfer_Equip_Mobility % 5.93% 5.41% 4.33% 5.41% 3.42% Mental Retardation_Bipolar % 7.33% 3.81% 5.29% 3.81% 4.38% Mental Retardation_Other Mental Illness % 14.01% 14.95% 16.17% 14.95% 16.21% Seizure Pre-22_Depression % 6.24% 5.79% 5.89% 5.79% 4.27% Other Federal DD_Bipolar % 1.39% 1.75% 1.80% 1.75% 0.90% Injury_Overnight % 3.00% 5.34% 5.89% 5.34% 3.88% Injury_Mental Illness_Age Under 30 1, % 0.69% 1.07% 0.36% 1.07% 0.90% Behaviors_Autism % 3.93% 6.55% 6.01% 6.55% 4.08% Trauma BI Post-22_Depression % 2.31% 2.59% 1.80% 2.59% 2.29% Muscular_Mental Illness_Age 60 and Under % 2.08% 2.19% 3.13% 2.19% 2.09% Overnight_Age Under % 4.93% 6.02% 4.45% 6.02% 5.65% Overnight_Mental Illness % 10.78% 7.85% 7.09% 7.85% 7.97% Overnight_Mental Illness_Age Under 30 1, % 2.16% 1.91% 1.08% 1.91% 2.56% Restrictive Measures_Autism 2, % 0.62% 0.69% 0.60% 0.69% 0.90% Behavioral Variables (Add-On) Cognition_ % 28.96% 33.53% 21.88% 33.53% 24.00% Injury_ % 7.62% 7.47% 4.45% 7.47% 3.48% Injury_ % 8.55% 6.55% 6.01% 6.55% 3.58% Mental Health_ % 55.94% 51.15% 55.07% 51.15% 50.94% Offensive_ % 15.86% 10.44% 7.70% 10.44% 5.89% Offensive_2 1, % 14.32% 13.60% 8.18% 13.60% 7.97% Offensive_3 2, % 8.39% 14.18% 17.13% 14.18% 13.26% Alcohol Drug Abuse % 2.79% 2.90% 3.01% 2.90% 3.09% Wander_ % 2.85% 4.34% 3.37% 4.34% 3.06% Medication Use (Add-On) Meds_2B % 68.69% 70.64% 67.63% 70.64% 68.64% Health Related Services (Add-On) Exercise % 21.33% 16.92% 8.78% 16.92% 8.16% Ostomy % 0.54% 0.23% 0.48% 0.23% 0.40% Overnight % 78.11% 79.86% 72.26% 79.86% 72.67% Reposition % 7.47% 7.55% 5.05% 7.55% 6.21% Respirate % 5.34% 4.42% 4.45% 4.42% 4.31% Tracheostomy 1, % 0.15% 0.15% 0.00% 0.15% 0.20% Tube Feedings % 2.31% 1.98% 2.04% 1.98% 1.59% Urinary % 1.19% 0.99% 0.36% 0.99% 1.00% Diagnoses (Add-On) Brain Injury Pre % 5.31% 7.09% 6.97% 7.09% 5.18% Mental Retardation % 77.20% 65.74% 70.72% 65.74% 73.20% Developmentally Disabled Composite $3, $3, $3, $3, $3, $3, $3, /14/2015 Milliman, Inc. Page 3 of 4

46 Exhibit D1Biv June 2015 Expansion Population MCO/GSR Functional Screen Attribute Distribution Developmentally Disabled Variable Statewide Estimate Care WI (GSR 13) LCD (GSR 13) Intercept (Grid Component) % % DD/NH Level of Care (Grid Component) Vent Dependent 6, % 0.18% DD1A % 3.39% DD % 75.12% Dual Enrollee % 65.92% Restrictive Measures 1, % 1.94% High Cost (5 Parameters) % 0.30% Number of IADLs (Grid Component) IADL_ % 24.27% IADL_ % 20.76% IADL_ % 54.90% Specific ADLs / Equipment Used (Add-On) Eating_ % 22.58% Toileting_ % 21.37% Transfer_ % 19.73% Interaction Terms (Add-On) Dress_Bath_Equip % 29.54% Transfer_Equip_Mobility % 5.08% Mental Retardation_Bipolar % 3.33% Mental Retardation_Other Mental Illness % 12.17% Seizure Pre-22_Depression % 3.63% Other Federal DD_Bipolar % 0.91% Injury_Overnight % 0.48% Injury_Mental Illness_Age Under 30 1, % 0.00% Behaviors_Autism % 0.85% Trauma BI Post-22_Depression % 1.09% Muscular_Mental Illness_Age 60 and Under % 1.03% Overnight_Age Under % 4.36% Overnight_Mental Illness % 2.91% Overnight_Mental Illness_Age Under 30 1, % 0.54% Restrictive Measures_Autism 2, % 0.54% Behavioral Variables (Add-On) Cognition_ % 23.79% Injury_ % 9.75% Injury_ % 3.57% Mental Health_ % 35.77% Offensive_ % 19.49% Offensive_2 1, % 5.39% Offensive_3 2, % 1.69% Alcohol Drug Abuse % 2.00% Wander_ % 1.63% Medication Use (Add-On) Meds_2B % 50.30% Health Related Services (Add-On) Exercise % 10.23% Ostomy % 0.36% Overnight % 65.19% Reposition % 6.23% Respirate % 3.87% Tracheostomy 1, % 0.24% Tube Feedings % 3.21% Urinary % 0.97% Diagnoses (Add-On) Brain Injury Pre % 4.48% Mental Retardation % 77.72% Developmentally Disabled Composite $3, $2, $2, /14/2015 Milliman, Inc. Page 4 of 4

47 Exhibit D2Ai 2014 Base Population MCO / GSR Functional Screen Attribute Distribution Physically Disabled Variable Statewide Estimate Care WI (GSR 2) Care WI (GSR 5) Care WI (GSR 5-6) Care WI (GSR 6) CCCW (GSR 4) CCCW (GSR 7) CCI (GSR 5-6) CCI (GSR 6) Intercept (Grid Component) % % % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent 5, % 0.88% 0.76% 0.00% 0.65% 0.20% 0.00% 0.56% SNF % 29.18% 33.32% 30.55% 24.07% 27.73% 32.45% 26.38% Number of IADLs (Grid Component) IADL_ % 23.93% 15.40% 29.08% 29.41% 30.04% 22.81% 31.49% IADL_ % 16.92% 14.23% 16.84% 16.44% 20.00% 18.16% 14.49% IADL_ % 22.37% 28.35% 32.04% 18.17% 22.01% 27.60% 24.01% IADL_ % 24.07% 30.40% 12.10% 23.20% 19.24% 20.09% 18.80% IADL_6 1, % 9.63% 8.86% 9.93% 10.50% 6.32% 9.19% 8.37% Specific ADLs / Equipment Used (Add-On) Bathing_ % 32.56% 23.67% 51.17% 34.76% 40.12% 39.10% 36.77% Bathing_ % 55.34% 67.09% 39.65% 44.65% 42.82% 48.72% 46.17% Toileting_ % 31.71% 40.06% 23.74% 23.61% 21.15% 24.29% 24.46% Transfer_ % 34.41% 42.19% 25.45% 24.35% 20.95% 26.48% 32.70% Interaction Terms (Add-On) Dress_Bath_Equip % 70.09% 65.46% 67.10% 60.08% 58.72% 67.31% 60.14% Dress_Toilet % 53.66% 56.48% 46.05% 42.38% 38.57% 44.18% 46.40% Transfer_Equip_Mobility % 10.25% 10.90% 1.20% 7.65% 6.02% 7.93% 7.21% Trauma BI Post-22_Alcohol/Drug Abuse % 0.71% 0.43% 6.29% 0.43% 1.73% 0.56% 1.39% Trauma BI Post-22_Exercise 1, % 0.00% 0.00% 0.00% 0.24% 0.00% 0.45% 0.29% Trauma BI Post-22_Other Mental Illness % 0.21% 0.02% 3.14% 0.49% 1.65% 1.90% 0.86% Disabled_Employment Assistance % 29.63% 22.94% 44.61% 37.95% 32.30% 33.37% 32.48% Overnight_Mental Illness % 8.92% 7.36% 1.05% 5.58% 7.46% 7.31% 4.15% Overnight_Age Under % 0.81% 0.73% 1.31% 0.82% 0.39% 1.04% 2.04% Mental Illness_3 or More Mental Disorders % 10.00% 8.54% 17.00% 11.58% 13.81% 12.26% 9.85% Injury_Overnight_Mental Illness 1, % 0.11% 0.00% 0.79% 0.11% 0.18% 0.45% 0.00% Spinal Injury_Alcohol/Drug Abuse % 0.21% 0.00% 0.00% 0.77% 0.39% 0.63% 0.55% Behavioral Variables (Add-On) Cognition_ % 14.36% 22.29% 7.64% 14.55% 11.45% 20.77% 14.49% Mental Health_ % 65.35% 69.90% 57.46% 73.87% 73.80% 69.07% 63.31% Offensive_ % 4.81% 4.42% 1.66% 3.16% 1.69% 1.82% 1.92% Offensive_ % 3.84% 3.59% 1.83% 2.53% 3.60% 4.07% 1.77% Offensive_3 1, % 0.85% 0.55% 2.62% 0.81% 1.67% 2.45% 2.08% Alcohol Drug Abuse % 8.57% 10.01% 14.71% 11.32% 16.85% 12.54% 10.84% Wander_ % 1.99% 2.05% 0.00% 1.48% 1.38% 1.54% 0.07% Medication Use (Add-On) Meds_2B % 38.87% 48.04% 38.88% 37.16% 39.83% 44.54% 45.61% Health Related Services (Add-On) Exercise % 35.22% 28.24% 9.96% 16.36% 12.69% 15.06% 16.45% Overnight % 64.83% 75.13% 56.49% 55.22% 50.46% 55.82% 59.35% Reposition % 13.33% 12.51% 2.56% 11.44% 7.83% 11.79% 15.12% Respirate % 8.79% 10.39% 9.35% 8.78% 8.36% 10.53% 9.17% Tracheostomy 3, % 0.74% 1.46% 0.00% 0.93% 0.23% 0.45% 0.68% Ulcer Stage % 3.33% 2.43% 2.08% 2.47% 2.28% 2.65% 2.30% Ulcer Stage % 2.11% 1.75% 0.00% 2.16% 1.14% 1.91% 2.27% Urinary % 2.60% 3.95% 1.20% 3.64% 2.77% 3.41% 4.86% Diagnoses (Add-On) Alzheimers % 17.12% 19.82% 7.59% 11.82% 14.73% 21.82% 13.98% Physically Disabled Composite $2, $1, $2, $2, $2, $2, $2, $2, $2, Implied Risk Score Exposure Months 671 5,659 3, ,861 6,079 2,681 4,177 12/14/2015 Milliman, Inc. Page 1 of 4

48 Exhibit D2Aii 2014 Base Population MCO/GSR Functional Screen Attribute Distribution Physically Disabled Variable Statewide Estimate CCI (GSR 8) CCI (GSR 10) CCI (GSR 11) ContinuUs (GSR 1) ContinuUs (GSR 3) LCD (GSR 9) MCDFC (GSR 8) MCDFC (GSR 11) WWC (GSR 2) Intercept (Grid Component) % % % % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent 5, % 0.36% 0.77% 0.80% 0.15% 0.15% 0.18% 0.00% 0.00% SNF % 24.91% 20.85% 24.77% 29.08% 28.00% 23.73% 21.03% 25.76% Number of IADLs (Grid Component) IADL_ % 34.61% 30.41% 32.61% 31.26% 21.24% 27.23% 25.81% 33.15% IADL_ % 13.80% 18.81% 16.03% 18.90% 17.33% 18.85% 19.35% 19.43% IADL_ % 20.87% 22.09% 22.32% 21.22% 30.70% 30.38% 30.83% 21.39% IADL_ % 19.01% 19.85% 19.17% 16.20% 23.03% 19.82% 17.42% 17.89% IADL_6 1, % 7.36% 6.43% 6.42% 7.53% 6.28% 2.77% 5.18% 4.02% Specific ADLs / Equipment Used (Add-On) Bathing_ % 52.11% 47.28% 42.77% 35.72% 40.37% 40.36% 44.25% 35.19% Bathing_ % 36.30% 37.68% 41.71% 47.74% 44.15% 48.91% 46.18% 33.50% Toileting_ % 15.68% 19.42% 22.95% 24.55% 25.24% 22.62% 28.41% 15.17% Transfer_ % 24.93% 22.62% 21.65% 25.97% 27.45% 22.16% 29.43% 16.50% Interaction Terms (Add-On) Dress_Bath_Equip % 66.68% 66.91% 64.32% 62.61% 60.37% 68.80% 63.23% 48.48% Dress_Toilet % 46.49% 43.90% 42.12% 43.89% 48.23% 45.11% 59.15% 29.89% Transfer_Equip_Mobility % 5.83% 6.02% 7.30% 8.98% 9.12% 6.35% 3.89% 5.93% Trauma BI Post-22_Alcohol/Drug Abuse % 0.73% 0.47% 1.46% 0.89% 0.96% 0.59% 0.90% 1.98% Trauma BI Post-22_Exercise 1, % 0.00% 0.00% 0.10% 0.17% 0.00% 0.06% 0.00% 0.20% Trauma BI Post-22_Other Mental Illness % 0.73% 0.01% 1.47% 1.00% 1.32% 0.42% 1.03% 1.50% Disabled_Employment Assistance % 28.25% 42.75% 25.94% 28.80% 27.43% 12.65% 43.42% 37.80% Overnight_Mental Illness % 4.62% 4.78% 5.50% 5.36% 9.34% 4.06% 5.12% 5.74% Overnight_Age Under % 1.28% 0.50% 0.93% 0.99% 0.55% 0.09% 0.00% 0.46% Mental Illness_3 or More Mental Disorders % 10.46% 12.21% 17.98% 7.98% 11.29% 7.97% 11.59% 14.86% Injury_Overnight_Mental Illness 1, % 0.00% 0.00% 0.54% 0.31% 0.00% 0.02% 0.00% 0.47% Spinal Injury_Alcohol/Drug Abuse % 0.82% 0.64% 0.67% 0.40% 0.59% 0.32% 0.00% 0.20% Behavioral Variables (Add-On) Cognition_ % 20.00% 14.32% 17.34% 14.19% 18.11% 16.60% 11.01% 13.18% Mental Health_ % 70.88% 56.76% 72.19% 59.04% 72.22% 52.50% 59.21% 74.11% Offensive_ % 3.82% 1.77% 4.19% 5.73% 3.29% 2.24% 1.42% 2.29% Offensive_ % 3.06% 1.58% 3.36% 1.95% 2.17% 1.51% 1.42% 1.79% Offensive_3 1, % 1.98% 1.36% 1.17% 1.13% 0.67% 0.40% 0.96% 1.41% Alcohol Drug Abuse % 17.76% 11.86% 12.85% 10.77% 13.96% 9.12% 11.16% 17.55% Wander_ % 2.05% 0.32% 1.37% 1.88% 1.19% 1.18% 0.12% 1.41% Medication Use (Add-On) Meds_2B % 42.19% 44.14% 36.78% 31.11% 42.79% 42.23% 30.27% 42.54% Health Related Services (Add-On) Exercise % 11.82% 11.24% 15.99% 16.93% 10.78% 7.47% 16.05% 12.61% Overnight % 53.51% 50.33% 50.08% 48.87% 61.23% 42.06% 56.81% 45.58% Reposition % 6.89% 9.28% 8.87% 7.37% 8.54% 7.95% 10.37% 7.44% Respirate % 10.45% 7.27% 10.95% 9.41% 9.23% 6.74% 8.88% 8.10% Tracheostomy 3, % 0.52% 1.25% 0.83% 0.74% 0.51% 0.34% 0.00% 0.34% Ulcer Stage % 0.83% 0.53% 2.56% 2.18% 0.99% 1.33% 2.32% 1.50% Ulcer Stage % 0.99% 1.61% 1.81% 2.63% 1.17% 1.02% 1.29% 1.45% Urinary % 2.12% 1.49% 1.63% 3.65% 1.07% 0.92% 0.70% 3.44% Diagnoses (Add-On) Alzheimers % 15.02% 14.81% 11.86% 13.90% 18.18% 22.77% 9.43% 12.92% Physically Disabled Composite $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, Implied Risk Score Exposure Months 8,658 3,288 6,777 8,216 7,163 9,953 43, ,716 12/14/2015 Milliman, Inc. Page 2 of 4

49 Exhibit D2Aiii 2014 Non-Base Population MCO/GSR Functional Screen Attribute Distribution Physically Disabled Variable Statewide Estimate CCI (GSR 9) ContinuUs (GSR 5) ContinuUs (GSR 5-6) LCD (GSR 10) MCDFC (GSR 5-6) MCDFC (GSR 6) Intercept (Grid Component) % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent 5, % 2.33% 0.00% 0.36% 0.00% 0.00% SNF % 23.03% 0.00% 24.91% 39.97% 48.93% Number of IADLs (Grid Component) IADL_ % 46.33% 66.27% 34.61% 19.44% 36.45% IADL_ % 14.28% 17.64% 13.80% 10.26% 14.46% IADL_ % 21.37% 16.08% 20.87% 35.19% 9.64% IADL_ % 16.96% 0.00% 19.01% 19.44% 39.45% IADL_6 1, % 1.07% 0.00% 7.36% 15.66% 0.00% Specific ADLs / Equipment Used (Add-On) Bathing_ % 54.62% 52.22% 52.11% 32.35% 17.31% Bathing_ % 32.17% 20.42% 36.30% 67.65% 40.17% Toileting_ % 24.72% 9.09% 15.68% 46.99% 32.14% Transfer_ % 23.18% 11.66% 24.93% 40.68% 36.96% Interaction Terms (Add-On) Dress_Bath_Equip % 47.86% 38.85% 66.68% 64.72% 51.79% Dress_Toilet % 36.48% 35.12% 46.49% 64.95% 40.54% Transfer_Equip_Mobility % 0.00% 0.00% 5.83% 24.30% 9.64% Trauma BI Post-22_Alcohol/Drug Abuse % 2.05% 0.00% 0.73% 0.00% 0.00% Trauma BI Post-22_Exercise 1, % 0.00% 0.00% 0.00% 0.00% 0.00% Trauma BI Post-22_Other Mental Illness % 0.00% 0.00% 0.73% 0.00% 0.00% Disabled_Employment Assistance % 46.44% 30.52% 28.25% 21.55% 39.55% Overnight_Mental Illness % 13.43% 0.00% 4.62% 5.36% 8.03% Overnight_Age Under % 0.00% 0.00% 1.28% 0.00% 0.00% Mental Illness_3 or More Mental Disorders % 19.79% 0.00% 10.46% 13.50% 8.03% Injury_Overnight_Mental Illness 1, % 0.00% 0.00% 0.00% 0.00% 0.00% Spinal Injury_Alcohol/Drug Abuse % 0.00% 0.00% 0.82% 5.40% 0.00% Behavioral Variables (Add-On) Cognition_ % 10.84% 20.42% 20.00% 18.86% 0.00% Mental Health_ % 61.81% 71.23% 70.88% 69.22% 38.31% Offensive_ % 0.00% 14.26% 3.82% 7.56% 0.00% Offensive_ % 3.47% 0.00% 3.06% 0.00% 6.43% Offensive_3 1, % 3.52% 0.00% 1.98% 0.00% 1.61% Alcohol Drug Abuse % 22.63% 0.00% 17.76% 15.07% 0.00% Wander_ % 7.39% 0.00% 2.05% 0.00% 0.00% Medication Use (Add-On) Meds_2B % 26.34% 10.14% 42.19% 55.54% 23.38% Health Related Services (Add-On) Exercise % 15.69% 5.94% 11.82% 25.38% 35.35% Overnight % 52.17% 44.37% 53.51% 73.05% 47.84% Reposition % 2.33% 0.00% 6.89% 27.54% 17.68% Respirate % 7.00% 9.09% 10.45% 17.24% 12.86% Tracheostomy 3, % 2.33% 0.00% 0.52% 0.00% 0.00% Ulcer Stage % 2.05% 0.00% 0.83% 5.94% 4.82% Ulcer Stage % 0.00% 0.00% 0.99% 4.32% 9.64% Urinary % 0.00% 0.00% 2.12% 1.08% 9.64% Diagnoses (Add-On) Alzheimers % 9.53% 12.51% 15.02% 25.38% 12.86% Physically Disabled Composite $2, $2, $2, $1, $2, $3, $2, Implied Risk Score Exposure Months /14/2015 Milliman, Inc. Page 3 of 4

50 Exhibit D2Aiv 2015 Expansion Population MCO/GSR Functional Screen Attribute Distribution Physically Disabled Variable Statewide Estimate Care WI (GSR 13) LCD (GSR 13) Intercept (Grid Component) % % DD/NH Level of Care (Grid Component) Vent Dependent 5, % 0.60% SNF % 20.95% Number of IADLs (Grid Component) IADL_ % 30.34% IADL_ % 21.24% IADL_ % 24.18% IADL_ % 16.61% IADL_6 1, % 4.72% Specific ADLs / Equipment Used (Add-On) Bathing_ % 39.79% Bathing_ % 44.45% Toileting_ % 22.74% Transfer_ % 26.11% Interaction Terms (Add-On) Dress_Bath_Equip % 61.62% Dress_Toilet % 46.10% Transfer_Equip_Mobility % 5.32% Trauma BI Post-22_Alcohol/Drug Abuse % 1.17% Trauma BI Post-22_Exercise 1, % 0.13% Trauma BI Post-22_Other Mental Illness % 1.13% Disabled_Employment Assistance % 29.29% Overnight_Mental Illness % 1.60% Overnight_Age Under % 0.49% Mental Illness_3 or More Mental Disorders % 8.09% Injury_Overnight_Mental Illness 1, % 0.00% Spinal Injury_Alcohol/Drug Abuse % 0.67% Behavioral Variables (Add-On) Cognition_ % 15.99% Mental Health_ % 51.19% Offensive_ % 3.46% Offensive_ % 0.77% Offensive_3 1, % 0.00% Alcohol Drug Abuse % 9.75% Wander_ % 1.03% Medication Use (Add-On) Meds_2B % 30.47% Health Related Services (Add-On) Exercise % 13.57% Overnight % 45.36% Reposition % 8.08% Respirate % 6.87% Tracheostomy 3, % 0.83% Ulcer Stage % 1.55% Ulcer Stage % 2.03% Urinary % 2.15% Diagnoses (Add-On) Alzheimers % 8.85% Physically Disabled Composite $2, $2, $2, Implied Risk Score Exposure Months /14/2015 Milliman, Inc. Page 4 of 4

51 Exhibit D2Bi June 2015 Base Population MCO / GSR Functional Screen Attribute Distribution Physically Disabled Variable Statewide Estimate Care WI (GSR 2) Care WI (GSR 5) Care WI (GSR 5-6) Care WI (GSR 6) CCCW (GSR 4) CCCW (GSR 7) CCI (GSR 5-6) CCI (GSR 6) Intercept (Grid Component) % % % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent 5, % 1.03% 1.46% 0.50% 0.52% 0.00% 0.41% 0.59% SNF % 26.18% 30.32% 26.22% 22.39% 28.65% 29.57% 25.26% Number of IADLs (Grid Component) IADL_ % 25.03% 14.68% 27.52% 31.56% 27.72% 23.41% 29.19% IADL_ % 17.35% 14.98% 16.71% 17.77% 21.19% 20.07% 16.32% IADL_ % 24.99% 32.51% 23.97% 16.11% 22.59% 26.05% 23.48% IADL_ % 23.65% 28.33% 20.57% 20.96% 20.99% 22.05% 20.02% IADL_6 1, % 7.34% 7.31% 8.49% 10.11% 5.72% 6.77% 8.32% Specific ADLs / Equipment Used (Add-On) Bathing_ % 31.08% 22.65% 39.35% 41.10% 41.95% 38.23% 40.00% Bathing_ % 56.05% 66.42% 49.28% 39.98% 40.89% 52.47% 48.85% Toileting_ % 29.68% 40.91% 27.47% 22.44% 22.31% 24.96% 27.34% Transfer_ % 30.75% 41.64% 32.21% 21.89% 20.35% 27.60% 31.80% Interaction Terms (Add-On) Dress_Bath_Equip % 71.52% 69.22% 62.03% 60.14% 60.17% 70.52% 62.83% Dress_Toilet % 50.34% 59.38% 49.44% 43.44% 41.53% 44.09% 48.74% Transfer_Equip_Mobility % 9.87% 10.96% 7.99% 7.00% 6.26% 7.03% 8.02% Trauma BI Post-22_Alcohol/Drug Abuse % 0.82% 0.73% 1.00% 0.39% 1.80% 0.41% 0.59% Trauma BI Post-22_Exercise 1, % 0.00% 0.00% 0.00% 0.26% 0.00% 0.00% 0.00% Trauma BI Post-22_Other Mental Illness % 0.00% 1.10% 1.00% 0.52% 1.61% 1.65% 0.89% Disabled_Employment Assistance % 30.42% 22.28% 35.40% 38.10% 34.10% 33.81% 34.11% Overnight_Mental Illness % 9.76% 8.40% 4.99% 5.83% 8.42% 8.68% 4.76% Overnight_Age Under % 0.62% 0.73% 2.25% 0.78% 0.26% 0.83% 2.38% Mental Illness_3 or More Mental Disorders % 11.68% 9.34% 11.33% 14.05% 17.20% 15.02% 10.51% Injury_Overnight_Mental Illness 1, % 0.00% 0.00% 0.25% 0.26% 0.39% 0.41% 0.30% Spinal Injury_Alcohol/Drug Abuse % 0.21% 0.00% 0.75% 0.91% 0.59% 0.41% 0.89% Behavioral Variables (Add-On) Cognition_ % 14.02% 23.38% 14.73% 14.97% 13.35% 18.74% 16.05% Mental Health_ % 66.53% 72.60% 66.36% 75.42% 77.33% 73.55% 66.51% Offensive_ % 4.32% 4.75% 1.50% 2.85% 1.41% 2.07% 1.49% Offensive_ % 3.50% 2.92% 2.50% 1.81% 3.72% 4.13% 1.78% Offensive_3 1, % 1.85% 0.73% 2.00% 0.65% 2.54% 2.48% 2.08% Alcohol Drug Abuse % 9.46% 9.13% 9.24% 12.00% 18.50% 12.91% 9.51% Wander_ % 1.85% 2.19% 0.50% 0.91% 0.78% 1.65% 0.30% Medication Use (Add-On) Meds_2B % 38.01% 52.81% 46.79% 37.00% 45.52% 44.11% 46.18% Health Related Services (Add-On) Exercise % 26.94% 23.38% 13.98% 14.52% 11.94% 18.19% 14.27% Overnight % 61.40% 75.82% 60.65% 56.38% 50.68% 55.18% 60.00% Reposition % 10.90% 12.78% 14.48% 9.85% 7.82% 9.51% 16.05% Respirate % 9.48% 9.86% 8.24% 8.68% 8.29% 12.40% 7.73% Tracheostomy 3, % 0.82% 2.19% 0.25% 0.91% 0.20% 0.41% 0.30% Ulcer Stage % 2.06% 5.11% 2.25% 1.94% 3.13% 2.48% 2.38% Ulcer Stage % 2.47% 1.10% 1.75% 1.65% 2.15% 1.24% 1.19% Urinary % 2.42% 4.02% 4.74% 3.76% 3.33% 4.96% 5.35% Diagnoses (Add-On) Alzheimers % 18.84% 18.26% 13.73% 10.93% 17.23% 19.58% 14.56% Physically Disabled Composite $2, $2, $2, $2, $2, $2, $2, $2, $2, /14/2015 Milliman, Inc. Page 1 of 4

52 Exhibit D2Bii June 2015 Base Population MCO/GSR Functional Screen Attribute Distribution Physically Disabled Variable Statewide Estimate CCI (GSR 8) CCI (GSR 10) CCI (GSR 11) ContinuUs (GSR 1) ContinuUs (GSR 3) LCD (GSR 9) MCDFC (GSR 8) MCDFC (GSR 11) WWC (GSR 2) Intercept (Grid Component) % % % % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent 5, % 0.35% 1.20% 0.72% 0.00% 0.13% 0.15% 1.05% 0.09% SNF % 29.64% 20.77% 26.97% 28.37% 24.05% 22.87% 21.90% 26.56% Number of IADLs (Grid Component) IADL_ % 32.08% 27.84% 34.00% 32.91% 22.17% 29.09% 27.38% 32.28% IADL_ % 15.26% 19.06% 17.00% 19.09% 17.63% 19.39% 19.34% 20.21% IADL_ % 23.69% 21.21% 20.43% 17.66% 29.13% 26.85% 22.22% 21.53% IADL_ % 18.69% 22.31% 19.87% 17.84% 21.99% 19.66% 21.71% 18.23% IADL_6 1, % 6.74% 6.84% 5.93% 6.93% 7.05% 3.70% 6.78% 4.34% Specific ADLs / Equipment Used (Add-On) Bathing_ % 51.41% 47.41% 48.79% 39.34% 41.07% 47.69% 47.88% 38.16% Bathing_ % 37.59% 40.61% 38.40% 43.70% 42.09% 44.98% 40.97% 33.88% Toileting_ % 16.91% 21.96% 23.94% 23.41% 22.78% 20.94% 21.90% 16.19% Transfer_ % 25.78% 24.35% 22.78% 24.46% 25.60% 21.39% 24.16% 17.29% Interaction Terms (Add-On) Dress_Bath_Equip % 69.00% 67.22% 68.43% 60.19% 61.43% 73.18% 68.58% 52.24% Dress_Toilet % 47.17% 48.35% 45.30% 43.77% 49.51% 47.90% 49.59% 32.76% Transfer_Equip_Mobility % 6.39% 6.16% 7.93% 8.92% 7.64% 6.57% 6.03% 6.48% Trauma BI Post-22_Alcohol/Drug Abuse % 0.35% 0.75% 1.59% 0.66% 1.15% 0.58% 0.81% 1.79% Trauma BI Post-22_Exercise 1, % 0.00% 0.00% 0.14% 0.16% 0.00% 0.06% 0.00% 0.26% Trauma BI Post-22_Other Mental Illness % 0.71% 0.06% 1.88% 0.82% 1.15% 0.40% 0.21% 1.36% Disabled_Employment Assistance % 27.61% 42.54% 25.98% 31.36% 28.85% 15.49% 42.39% 38.08% Overnight_Mental Illness % 6.74% 4.28% 7.16% 5.74% 12.41% 4.81% 5.27% 5.82% Overnight_Age Under % 1.77% 0.51% 0.87% 0.66% 0.77% 0.03% 0.60% 0.34% Mental Illness_3 or More Mental Disorders % 11.74% 13.86% 17.97% 11.00% 12.64% 9.38% 14.61% 17.09% Injury_Overnight_Mental Illness 1, % 0.35% 0.00% 0.72% 0.33% 0.00% 0.12% 0.15% 0.18% Spinal Injury_Alcohol/Drug Abuse % 0.71% 0.34% 0.43% 0.49% 0.26% 0.31% 0.30% 0.26% Behavioral Variables (Add-On) Cognition_ % 20.58% 13.86% 16.76% 12.95% 18.28% 15.54% 13.86% 13.33% Mental Health_ % 77.18% 60.58% 77.77% 66.75% 73.27% 59.56% 61.62% 75.70% Offensive_ % 5.32% 1.54% 2.17% 5.34% 4.10% 1.97% 1.36% 2.99% Offensive_ % 4.61% 1.54% 3.33% 2.30% 1.54% 1.54% 1.36% 2.30% Offensive_3 1, % 1.77% 0.68% 2.02% 0.82% 0.51% 0.89% 0.60% 1.29% Alcohol Drug Abuse % 19.16% 12.55% 14.89% 12.31% 14.51% 9.99% 12.56% 18.14% Wander_ % 1.77% 0.34% 1.45% 1.89% 1.03% 0.88% 0.30% 1.62% Medication Use (Add-On) Meds_2B % 43.35% 46.73% 40.48% 31.07% 41.37% 46.15% 46.23% 42.66% Health Related Services (Add-On) Exercise % 11.71% 11.81% 15.76% 14.77% 8.84% 5.83% 11.15% 13.76% Overnight % 58.07% 55.50% 52.36% 50.28% 60.73% 52.00% 56.90% 53.74% Reposition % 6.98% 9.31% 8.78% 6.84% 7.64% 8.14% 9.25% 7.32% Respirate % 11.35% 7.19% 10.91% 8.43% 7.96% 6.42% 6.93% 8.20% Tracheostomy 3, % 0.71% 1.20% 1.16% 0.43% 0.26% 0.50% 1.05% 0.26% Ulcer Stage % 0.71% 0.86% 2.02% 1.97% 0.38% 1.42% 0.90% 2.38% Ulcer Stage % 1.42% 1.37% 1.88% 1.81% 0.77% 0.95% 1.51% 1.62% Urinary % 2.13% 1.37% 1.74% 3.14% 1.03% 0.99% 1.66% 3.40% Diagnoses (Add-On) Alzheimers % 17.39% 16.32% 11.92% 13.30% 17.08% 20.40% 15.42% 13.41% Physically Disabled Composite $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, /14/2015 Milliman, Inc. Page 2 of 4

53 Exhibit D2Biii June 2015 Non-Base Population MCO/GSR Functional Screen Attribute Distribution Physically Disabled Variable Statewide Estimate CCI (GSR 9) ContinuUs (GSR 5) ContinuUs (GSR 5-6) LCD (GSR 10) MCDFC (GSR 5-6) MCDFC (GSR 6) Intercept (Grid Component) % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent 5, % 0.98% 0.92% 0.35% 0.92% 0.50% SNF % 26.42% 29.79% 29.64% 29.79% 26.22% Number of IADLs (Grid Component) IADL_ % 25.91% 19.27% 32.08% 19.27% 27.52% IADL_ % 17.19% 17.51% 15.26% 17.51% 16.71% IADL_ % 25.49% 29.44% 23.69% 29.44% 23.97% IADL_ % 22.82% 25.10% 18.69% 25.10% 20.57% IADL_6 1, % 7.02% 6.67% 6.74% 6.67% 8.49% Specific ADLs / Equipment Used (Add-On) Bathing_ % 32.69% 30.55% 51.41% 30.55% 39.35% Bathing_ % 54.81% 59.09% 37.59% 59.09% 49.28% Toileting_ % 28.98% 33.50% 16.91% 33.50% 27.47% Transfer_ % 29.82% 35.07% 25.78% 35.07% 32.21% Interaction Terms (Add-On) Dress_Bath_Equip % 70.59% 69.54% 69.00% 69.54% 62.03% Dress_Toilet % 49.54% 52.57% 47.17% 52.57% 49.44% Transfer_Equip_Mobility % 9.45% 9.35% 6.39% 9.35% 7.99% Trauma BI Post-22_Alcohol/Drug Abuse % 0.98% 0.55% 0.35% 0.55% 1.00% Trauma BI Post-22_Exercise 1, % 0.00% 0.00% 0.00% 0.00% 0.00% Trauma BI Post-22_Other Mental Illness % 0.20% 1.28% 0.71% 1.28% 1.00% Disabled_Employment Assistance % 31.07% 27.13% 27.61% 27.13% 35.40% Overnight_Mental Illness % 9.53% 8.07% 6.74% 8.07% 4.99% Overnight_Age Under % 0.59% 0.73% 1.77% 0.73% 2.25% Mental Illness_3 or More Mental Disorders % 12.35% 12.08% 11.74% 12.08% 11.33% Injury_Overnight_Mental Illness 1, % 0.00% 0.18% 0.35% 0.18% 0.25% Spinal Injury_Alcohol/Drug Abuse % 0.20% 0.37% 0.71% 0.37% 0.75% Behavioral Variables (Add-On) Cognition_ % 13.61% 21.14% 20.58% 21.14% 14.73% Mental Health_ % 66.79% 72.87% 77.18% 72.87% 66.36% Offensive_ % 4.13% 3.54% 5.32% 3.54% 1.50% Offensive_ % 3.35% 3.48% 4.61% 3.48% 2.50% Offensive_3 1, % 1.97% 1.47% 1.77% 1.47% 2.00% Alcohol Drug Abuse % 9.84% 10.67% 19.16% 10.67% 9.24% Wander_ % 1.77% 1.83% 1.77% 1.83% 0.50% Medication Use (Add-On) Meds_2B % 37.15% 47.95% 43.35% 47.95% 46.79% Health Related Services (Add-On) Exercise % 26.36% 20.53% 11.71% 20.53% 13.98% Overnight % 61.50% 65.41% 58.07% 65.41% 60.65% Reposition % 10.43% 11.60% 6.98% 11.60% 14.48% Respirate % 9.86% 10.87% 11.35% 10.87% 8.24% Tracheostomy 3, % 0.98% 1.28% 0.71% 1.28% 0.25% Ulcer Stage % 1.97% 3.85% 0.71% 3.85% 2.25% Ulcer Stage % 2.36% 1.10% 1.42% 1.10% 1.75% Urinary % 2.32% 4.22% 2.13% 4.22% 4.74% Diagnoses (Add-On) Alzheimers % 18.22% 19.13% 17.39% 19.13% 13.73% Physically Disabled Composite $2, $2, $2, $2, $2, $2, $2, /14/2015 Milliman, Inc. Page 3 of 4

54 Exhibit D2Biv June 2015 Expansion Population MCO/GSR Functional Screen Attribute Distribution Physically Disabled Variable Statewide Estimate Care WI (GSR 13) LCD (GSR 13) Intercept (Grid Component) % % DD/NH Level of Care (Grid Component) Vent Dependent 5, % 0.61% SNF % 20.53% Number of IADLs (Grid Component) IADL_ % 29.40% IADL_ % 20.17% IADL_ % 25.64% IADL_ % 17.62% IADL_6 1, % 4.25% Specific ADLs / Equipment Used (Add-On) Bathing_ % 40.46% Bathing_ % 44.23% Toileting_ % 22.60% Transfer_ % 25.39% Interaction Terms (Add-On) Dress_Bath_Equip % 62.45% Dress_Toilet % 46.29% Transfer_Equip_Mobility % 4.74% Trauma BI Post-22_Alcohol/Drug Abuse % 1.22% Trauma BI Post-22_Exercise 1, % 0.24% Trauma BI Post-22_Other Mental Illness % 1.58% Disabled_Employment Assistance % 29.53% Overnight_Mental Illness % 1.70% Overnight_Age Under % 0.36% Mental Illness_3 or More Mental Disorders % 8.99% Injury_Overnight_Mental Illness 1, % 0.00% Spinal Injury_Alcohol/Drug Abuse % 0.49% Behavioral Variables (Add-On) Cognition_ % 17.62% Mental Health_ % 52.61% Offensive_ % 3.52% Offensive_ % 0.85% Offensive_3 1, % 0.00% Alcohol Drug Abuse % 9.60% Wander_ % 0.85% Medication Use (Add-On) Meds_2B % 31.23% Health Related Services (Add-On) Exercise % 13.12% Overnight % 45.57% Reposition % 7.65% Respirate % 6.20% Tracheostomy 3, % 0.85% Ulcer Stage % 1.46% Ulcer Stage % 1.58% Urinary % 2.31% Diagnoses (Add-On) Alzheimers % 8.51% Physically Disabled Composite $2, $2, $2, /14/2015 Milliman, Inc. Page 4 of 4

55 Exhibit D3Ai 2014 Base Population MCO / GSR Functional Screen Attribute Distribution Frail Elderly Variable Statewide Estimate Care WI (GSR 2) Care WI (GSR 5) Care WI (GSR 5-6) Care WI (GSR 6) CCCW (GSR 4) CCCW (GSR 7) CCI (GSR 5-6) CCI (GSR 6) Intercept (Grid Component) % % % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent % 0.11% 0.07% 1.62% 0.04% 0.20% 0.01% 0.00% SNF % 27.16% 31.85% 17.09% 22.54% 17.27% 28.20% 19.96% Number of IADLs (Grid Component) IADL_ % 3.07% 1.10% 0.30% 3.32% 5.35% 1.95% 2.82% IADL_ % 13.43% 11.73% 16.62% 20.40% 27.46% 14.87% 18.50% IADL_ % 82.86% 87.17% 83.08% 75.74% 66.63% 82.87% 78.67% Specific ADLs / Equipment Used (Add-On) Bathing_ % 17.72% 14.28% 16.43% 23.52% 24.38% 24.23% 27.73% Bathing_ % 75.17% 79.50% 77.54% 67.31% 66.04% 64.72% 65.34% Toileting_ % 25.72% 20.99% 18.14% 25.61% 25.22% 24.02% 33.60% Toileting_ % 41.72% 44.71% 48.75% 35.61% 32.10% 27.73% 27.88% Transfer_ % 36.37% 38.04% 38.42% 29.94% 26.98% 25.94% 30.55% Interaction Terms (Add-On) Bath_Equip_Eat % 45.82% 41.03% 39.86% 40.06% 41.15% 36.84% 39.94% Transfer_Equip_Mobility % 6.13% 5.51% 4.41% 6.06% 7.48% 6.37% 5.57% Seizure Post-22_Schizophrenia % 0.22% 0.22% 0.00% 0.29% 0.00% 0.00% 0.00% Injury_Overnight 1, % 0.22% 0.01% 0.00% 0.02% 0.08% 0.21% 0.19% Behavioral Variables (Add-On) Mental Health_ % 51.82% 60.65% 45.60% 59.70% 51.00% 52.32% 50.66% Offensive_ % 5.45% 4.02% 0.69% 2.41% 1.40% 2.52% 1.28% Offensive_ % 5.26% 5.10% 6.70% 3.48% 2.36% 3.17% 1.92% Offensive_ % 2.43% 0.96% 2.34% 2.12% 0.65% 1.62% 1.62% Alcohol Drug Abuse % 3.67% 2.77% 2.16% 2.52% 2.96% 4.72% 3.02% Wander_ % 5.74% 4.14% 2.87% 3.26% 2.43% 5.20% 1.95% Health Related Services (Add-On) Exercise % 30.46% 24.61% 22.96% 11.26% 14.15% 6.83% 4.12% Med Management % 28.11% 40.86% 30.00% 28.80% 23.27% 39.54% 21.65% Overnight % 84.59% 87.01% 85.52% 74.89% 68.68% 79.90% 81.54% Reposition % 8.71% 7.93% 6.62% 10.12% 6.35% 8.66% 6.39% Respirate % 9.66% 6.66% 9.31% 8.60% 8.85% 6.55% 7.86% Tube Feedings % 0.18% 0.00% 0.63% 0.16% 0.11% 0.41% 0.45% Ulcer Stage % 0.90% 1.40% 0.63% 1.00% 1.95% 1.27% 0.87% Diagnoses (Add-On) Alzheimers % 53.06% 61.80% 34.41% 49.48% 42.62% 49.91% 49.58% Mental Illness % 12.66% 13.18% 8.91% 8.50% 8.71% 11.69% 9.25% Frail Elderly Composite $2, $2, $2, $2, $2, $2, $2, $2, $2, Implied Risk Score Exposure Months 351 5,580 5, ,422 7,585 3,804 6,312 12/14/2015 Milliman, Inc. Page 1 of 4

56 Exhibit D3Aii 2014 Base Population MCO/GSR Functional Screen Attribute Distribution Frail Elderly Variable Statewide Estimate CCI (GSR 8) CCI (GSR 10) CCI (GSR 11) ContinuUs (GSR 1) ContinuUs (GSR 3) LCD (GSR 9) MCDFC (GSR 8) MCDFC (GSR 11) WWC (GSR 2) Intercept (Grid Component) % % % % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent % 0.00% 0.17% 0.00% 0.00% 0.00% 0.08% 0.28% 0.09% SNF % 19.94% 18.44% 25.22% 26.74% 23.07% 23.51% 13.36% 30.01% Number of IADLs (Grid Component) IADL_ % 4.19% 4.84% 5.31% 6.30% 2.59% 4.97% 5.51% 4.98% IADL_ % 20.56% 16.62% 20.23% 24.84% 14.24% 26.73% 26.57% 24.51% IADL_ % 74.31% 78.08% 73.44% 67.70% 82.82% 67.63% 67.92% 69.32% Specific ADLs / Equipment Used (Add-On) Bathing_ % 37.71% 33.52% 29.46% 24.06% 30.99% 33.09% 35.84% 24.34% Bathing_ % 53.88% 58.56% 60.03% 65.00% 57.43% 57.30% 60.08% 61.35% Toileting_ % 30.24% 29.01% 20.40% 18.99% 28.54% 24.20% 53.44% 20.34% Toileting_ % 22.50% 29.89% 34.03% 33.32% 29.30% 26.91% 22.08% 28.97% Transfer_ % 26.23% 28.17% 27.22% 29.59% 28.97% 22.78% 27.39% 26.70% Interaction Terms (Add-On) Bath_Equip_Eat % 37.63% 45.22% 40.44% 35.70% 36.27% 34.33% 22.67% 33.06% Transfer_Equip_Mobility % 5.82% 5.56% 7.45% 7.90% 7.03% 5.18% 9.49% 9.07% Seizure Post-22_Schizophrenia % 0.17% 0.52% 0.22% 0.18% 0.05% 0.83% 0.00% 0.42% Injury_Overnight 1, % 0.10% 0.38% 0.21% 0.18% 0.19% 0.06% 0.00% 0.13% Behavioral Variables (Add-On) Mental Health_ % 56.33% 46.16% 56.38% 50.18% 49.98% 50.08% 36.76% 52.83% Offensive_ % 1.69% 1.37% 3.09% 5.63% 3.71% 2.22% 3.48% 2.84% Offensive_ % 2.44% 1.51% 4.98% 3.06% 1.84% 1.71% 2.02% 4.14% Offensive_ % 2.36% 1.01% 1.05% 0.86% 0.90% 0.61% 0.57% 1.46% Alcohol Drug Abuse % 3.19% 2.33% 3.71% 2.95% 4.68% 3.31% 4.00% 4.52% Wander_ % 2.30% 2.83% 3.90% 6.26% 4.52% 2.69% 1.17% 4.13% Health Related Services (Add-On) Exercise % 6.65% 4.66% 13.59% 12.59% 5.54% 5.70% 4.80% 16.39% Med Management % 21.78% 24.13% 32.56% 25.02% 21.64% 34.17% 31.39% 25.53% Overnight % 70.79% 77.33% 72.41% 65.75% 82.53% 55.38% 67.97% 71.01% Reposition % 5.28% 6.61% 8.44% 5.85% 8.58% 6.96% 7.96% 8.26% Respirate % 7.85% 7.02% 10.30% 8.43% 8.71% 5.92% 2.96% 7.17% Tube Feedings % 0.05% 0.61% 0.61% 0.22% 0.50% 0.77% 0.37% 0.17% Ulcer Stage % 0.81% 0.87% 1.72% 1.07% 0.99% 0.97% 0.78% 1.22% Diagnoses (Add-On) Alzheimers % 41.95% 58.36% 46.78% 46.58% 55.55% 50.26% 51.37% 43.08% Mental Illness % 8.00% 9.03% 10.72% 8.90% 19.41% 10.38% 8.06% 9.37% Frail Elderly Composite $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, Implied Risk Score Exposure Months 3,332 5,168 5,812 8,242 6,608 6,463 28, ,266 12/14/2015 Milliman, Inc. Page 2 of 4

57 Exhibit D3Aiii 2014 Non-Base Population MCO/GSR Functional Screen Attribute Distribution Frail Elderly Variable Statewide Estimate CCI (GSR 9) ContinuUs (GSR 5) ContinuUs (GSR 5-6) LCD (GSR 10) MCDFC (GSR 5-6) MCDFC (GSR 6) Intercept (Grid Component) % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent % 0.00% 0.00% 0.00% 0.00% 0.00% SNF % 27.55% 1.90% 19.94% 35.26% 29.54% Number of IADLs (Grid Component) IADL_ % 7.38% 32.10% 4.19% 0.00% 1.26% IADL_ % 9.28% 43.59% 20.56% 8.23% 54.74% IADL_ % 83.33% 24.31% 74.31% 91.76% 44.00% Specific ADLs / Equipment Used (Add-On) Bathing_ % 17.72% 27.99% 37.71% 23.83% 54.57% Bathing_ % 74.15% 31.89% 53.88% 76.17% 44.17% Toileting_ % 31.66% 4.83% 30.24% 34.29% 0.00% Toileting_ % 23.11% 11.37% 22.50% 32.04% 29.54% Transfer_ % 4.65% 1.90% 26.23% 37.12% 29.54% Interaction Terms (Add-On) Bath_Equip_Eat % 50.44% 28.43% 37.63% 31.49% 29.54% Transfer_Equip_Mobility % 0.86% 0.00% 5.82% 12.00% 14.64% Seizure Post-22_Schizophrenia % 0.00% 0.00% 0.17% 0.00% 0.00% Injury_Overnight 1, % 0.00% 0.00% 0.10% 0.00% 0.00% Behavioral Variables (Add-On) Mental Health_ % 25.97% 35.46% 56.33% 59.39% 51.32% Offensive_ % 0.10% 0.00% 1.69% 0.00% 1.26% Offensive_ % 8.86% 0.00% 2.44% 0.00% 5.56% Offensive_ % 0.00% 0.00% 2.36% 3.75% 0.00% Alcohol Drug Abuse % 8.86% 9.91% 3.19% 6.75% 0.00% Wander_ % 14.03% 0.00% 2.30% 6.75% 0.00% Health Related Services (Add-On) Exercise % 5.91% 11.37% 6.65% 9.00% 23.98% Med Management % 32.62% 13.27% 21.78% 39.71% 14.90% Overnight % 92.62% 44.31% 70.79% 88.00% 29.54% Reposition % 3.08% 1.90% 5.28% 17.45% 20.20% Respirate % 2.22% 0.00% 7.85% 5.83% 0.00% Tube Feedings % 0.00% 0.00% 0.05% 3.00% 0.00% Ulcer Stage % 0.00% 17.06% 0.81% 0.00% 0.00% Diagnoses (Add-On) Alzheimers % 42.82% 24.31% 41.95% 40.22% 29.10% Mental Illness % 11.72% 0.00% 8.00% 15.75% 0.00% Frail Elderly Composite $2, $2, $2, $1, $2, $2, $2, Implied Risk Score Exposure Months /14/2015 Milliman, Inc. Page 3 of 4

58 Exhibit D3Aiv 2015 Expansion Population MCO/GSR Functional Screen Attribute Distribution Frail Elderly Variable Statewide Estimate Care WI (GSR 13) LCD (GSR 13) Intercept (Grid Component) % % DD/NH Level of Care (Grid Component) Vent Dependent % 0.11% SNF % 14.98% Number of IADLs (Grid Component) IADL_ % 7.86% IADL_ % 32.24% IADL_ % 58.95% Specific ADLs / Equipment Used (Add-On) Bathing_ % 41.59% Bathing_ % 50.19% Toileting_ % 28.02% Toileting_ % 18.00% Transfer_ % 17.87% Interaction Terms (Add-On) Bath_Equip_Eat % 25.70% Transfer_Equip_Mobility % 3.25% Seizure Post-22_Schizophrenia % 0.00% Injury_Overnight 1, % 0.11% Behavioral Variables (Add-On) Mental Health_ % 38.45% Offensive_ % 1.09% Offensive_ % 0.42% Offensive_ % 0.00% Alcohol Drug Abuse % 3.04% Wander_ % 2.05% Health Related Services (Add-On) Exercise % 4.17% Med Management % 16.77% Overnight % 53.91% Reposition % 2.64% Respirate % 5.74% Tube Feedings % 0.16% Ulcer Stage % 0.74% Diagnoses (Add-On) Alzheimers % 40.18% Mental Illness % 7.00% Frail Elderly Composite $2, $2, $2, Implied Risk Score Exposure Months /14/2015 Milliman, Inc. Page 4 of 4

59 Exhibit D3Bi June 2015 Base Population MCO / GSR Functional Screen Attribute Distribution Frail Elderly Variable Statewide Estimate Care WI (GSR 2) Care WI (GSR 5) Care WI (GSR 5-6) Care WI (GSR 6) CCCW (GSR 4) CCCW (GSR 7) CCI (GSR 5-6) CCI (GSR 6) Intercept (Grid Component) % % % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent % 0.21% 0.00% 0.00% 0.10% 0.00% 0.00% 0.00% SNF % 24.89% 28.81% 22.45% 24.02% 20.76% 31.19% 22.74% Number of IADLs (Grid Component) IADL_ % 3.29% 1.67% 3.33% 3.85% 6.27% 1.58% 3.64% IADL_ % 14.88% 11.88% 16.30% 20.36% 27.40% 13.09% 16.44% IADL_ % 81.63% 86.45% 80.37% 75.02% 66.32% 85.33% 79.93% Specific ADLs / Equipment Used (Add-On) Bathing_ % 19.56% 12.90% 28.84% 27.97% 30.00% 21.93% 30.68% Bathing_ % 73.84% 80.44% 65.60% 63.75% 61.75% 69.57% 63.57% Toileting_ % 26.37% 21.73% 28.03% 28.00% 24.06% 22.18% 28.66% Toileting_ % 39.82% 45.46% 36.69% 34.76% 32.66% 32.63% 34.28% Transfer_ % 35.62% 36.58% 32.14% 28.50% 26.61% 30.61% 31.95% Interaction Terms (Add-On) Bath_Equip_Eat % 48.73% 43.15% 39.14% 40.82% 40.44% 45.82% 38.27% Transfer_Equip_Mobility % 7.03% 5.15% 6.29% 6.45% 7.55% 8.46% 6.47% Seizure Post-22_Schizophrenia % 0.21% 0.04% 0.00% 0.29% 0.00% 0.00% 0.00% Injury_Overnight 1, % 0.42% 0.00% 0.17% 0.10% 0.00% 0.29% 0.19% Behavioral Variables (Add-On) Mental Health_ % 50.14% 55.48% 52.81% 60.35% 55.70% 51.71% 54.39% Offensive_ % 6.32% 5.00% 1.68% 1.65% 1.45% 2.31% 1.16% Offensive_ % 4.11% 4.41% 2.23% 5.13% 3.13% 4.04% 2.37% Offensive_ % 3.72% 1.46% 1.52% 1.76% 0.64% 3.17% 1.16% Alcohol Drug Abuse % 2.96% 1.91% 2.36% 3.07% 2.41% 4.04% 2.33% Wander_ % 5.46% 6.66% 2.97% 4.25% 3.61% 4.62% 2.52% Health Related Services (Add-On) Exercise % 27.31% 19.77% 4.68% 8.79% 11.90% 8.95% 3.25% Med Management % 24.53% 29.09% 21.48% 29.67% 25.16% 39.84% 21.56% Overnight % 87.03% 89.00% 84.59% 77.55% 69.36% 80.92% 83.82% Reposition % 6.18% 7.70% 6.88% 7.69% 6.10% 11.05% 6.76% Respirate % 9.67% 6.74% 7.69% 7.95% 8.77% 7.59% 7.68% Tube Feedings % 0.42% 0.00% 0.17% 0.29% 0.32% 0.87% 0.19% Ulcer Stage % 1.48% 2.29% 0.84% 0.96% 1.93% 1.58% 0.97% Diagnoses (Add-On) Alzheimers % 51.02% 59.95% 48.18% 47.23% 41.62% 54.92% 48.88% Mental Illness % 10.97% 10.24% 8.84% 8.62% 9.78% 11.60% 9.01% Frail Elderly Composite $2, $2, $2, $2, $2, $2, $2, $2, $2, /14/2015 Milliman, Inc. Page 1 of 4

60 Exhibit D3Bii June 2015 Base Population MCO/GSR Functional Screen Attribute Distribution Frail Elderly Variable Statewide Estimate CCI (GSR 8) CCI (GSR 10) CCI (GSR 11) ContinuUs (GSR 1) ContinuUs (GSR 3) LCD (GSR 9) MCDFC (GSR 8) MCDFC (GSR 11) WWC (GSR 2) Intercept (Grid Component) % % % % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent % 0.00% 0.20% 0.00% 0.00% 0.00% 0.04% 0.18% 0.10% SNF % 21.17% 18.39% 25.72% 24.22% 23.77% 22.37% 18.06% 28.97% Number of IADLs (Grid Component) IADL_ % 3.55% 4.70% 3.85% 7.57% 1.87% 4.63% 4.65% 4.38% IADL_ % 17.92% 15.76% 20.42% 25.88% 15.42% 26.96% 16.77% 25.09% IADL_ % 77.87% 79.34% 75.16% 64.76% 82.31% 67.85% 78.40% 69.54% Specific ADLs / Equipment Used (Add-On) Bathing_ % 39.36% 32.14% 31.08% 29.99% 28.67% 35.29% 32.72% 26.08% Bathing_ % 54.22% 62.48% 60.79% 58.67% 62.57% 59.18% 62.01% 60.73% Toileting_ % 35.98% 25.66% 22.91% 19.86% 30.65% 28.19% 25.79% 23.47% Toileting_ % 20.92% 34.38% 33.05% 31.74% 30.30% 28.16% 34.35% 28.31% Transfer_ % 25.06% 30.62% 26.64% 27.51% 30.91% 25.18% 31.28% 26.88% Interaction Terms (Add-On) Bath_Equip_Eat % 35.18% 46.66% 41.79% 35.62% 39.12% 39.02% 46.63% 35.54% Transfer_Equip_Mobility % 3.91% 6.32% 7.20% 6.50% 8.81% 6.56% 6.68% 8.66% Seizure Post-22_Schizophrenia % 0.22% 0.40% 0.43% 0.00% 0.00% 0.72% 0.37% 0.50% Injury_Overnight 1, % 0.00% 0.20% 0.29% 0.18% 0.40% 0.08% 0.18% 0.10% Behavioral Variables (Add-On) Mental Health_ % 54.05% 45.95% 58.78% 55.15% 48.66% 53.14% 45.27% 55.49% Offensive_ % 3.57% 1.61% 2.39% 3.52% 2.83% 2.08% 1.65% 3.07% Offensive_ % 2.37% 1.41% 5.14% 3.59% 3.24% 1.62% 1.29% 5.15% Offensive_ % 2.00% 0.81% 2.14% 1.23% 1.01% 0.91% 0.73% 1.19% Alcohol Drug Abuse % 3.03% 2.82% 4.74% 2.29% 5.78% 3.25% 2.76% 4.06% Wander_ % 2.22% 3.69% 3.86% 5.64% 3.24% 2.65% 3.36% 3.37% Health Related Services (Add-On) Exercise % 6.45% 4.34% 14.13% 11.25% 6.38% 5.10% 4.14% 16.48% Med Management % 21.94% 22.88% 28.72% 20.84% 25.27% 27.50% 22.37% 27.85% Overnight % 73.27% 81.06% 74.33% 65.62% 85.37% 66.99% 80.88% 78.22% Reposition % 4.91% 6.57% 6.69% 4.53% 9.97% 8.35% 6.73% 11.95% Respirate % 10.99% 7.48% 9.79% 6.97% 10.16% 6.45% 7.75% 8.53% Tube Feedings % 0.00% 1.01% 0.29% 0.18% 0.40% 0.60% 0.92% 0.10% Ulcer Stage % 1.33% 0.60% 1.43% 0.69% 0.40% 1.47% 0.55% 1.78% Diagnoses (Add-On) Alzheimers % 42.17% 58.26% 50.15% 46.21% 53.86% 49.03% 57.58% 42.30% Mental Illness % 9.46% 7.67% 10.87% 9.27% 20.36% 10.80% 7.57% 10.76% Frail Elderly Composite $2, $2, $2, $2, $2, $2, $2, $2, $2, $2, /14/2015 Milliman, Inc. Page 2 of 4

61 Exhibit D3Biii June 2015 Non-Base Population MCO/GSR Functional Screen Attribute Distribution Frail Elderly Variable Statewide Estimate CCI (GSR 9) ContinuUs (GSR 5) ContinuUs (GSR 5-6) LCD (GSR 10) MCDFC (GSR 5-6) MCDFC (GSR 6) Intercept (Grid Component) % % % % % % DD/NH Level of Care (Grid Component) Vent Dependent % 0.20% 0.00% 0.00% 0.00% 0.00% SNF % 24.85% 29.75% 21.17% 29.75% 22.45% Number of IADLs (Grid Component) IADL_ % 3.55% 1.57% 3.55% 1.57% 3.33% IADL_ % 15.05% 12.57% 17.92% 12.57% 16.30% IADL_ % 81.19% 85.86% 77.87% 85.86% 80.37% Specific ADLs / Equipment Used (Add-On) Bathing_ % 20.35% 17.22% 39.36% 17.22% 28.84% Bathing_ % 73.13% 75.36% 54.22% 75.36% 65.60% Toileting_ % 26.87% 21.78% 35.98% 21.78% 28.03% Toileting_ % 39.34% 40.16% 20.92% 40.16% 36.69% Transfer_ % 34.92% 34.71% 25.06% 34.71% 32.14% Interaction Terms (Add-On) Bath_Equip_Eat % 48.89% 44.20% 35.18% 44.20% 39.14% Transfer_Equip_Mobility % 6.93% 6.79% 3.91% 6.79% 6.29% Seizure Post-22_Schizophrenia % 0.20% 0.02% 0.22% 0.02% 0.00% Injury_Overnight 1, % 0.41% 0.12% 0.00% 0.12% 0.17% Behavioral Variables (Add-On) Mental Health_ % 50.24% 53.99% 54.05% 53.99% 52.81% Offensive_ % 6.26% 3.74% 3.57% 3.74% 1.68% Offensive_ % 4.14% 4.12% 2.37% 4.12% 2.23% Offensive_ % 3.56% 2.10% 2.00% 2.10% 1.52% Alcohol Drug Abuse % 3.04% 2.83% 3.03% 2.83% 2.36% Wander_ % 5.84% 5.73% 2.22% 5.73% 2.97% Health Related Services (Add-On) Exercise % 26.55% 14.84% 6.45% 14.84% 4.68% Med Management % 25.51% 34.24% 21.94% 34.24% 21.48% Overnight % 86.98% 85.62% 73.27% 85.62% 84.59% Reposition % 6.12% 9.27% 4.91% 9.27% 6.88% Respirate % 9.26% 7.44% 10.99% 7.44% 7.69% Tube Feedings % 0.41% 0.47% 0.00% 0.47% 0.17% Ulcer Stage % 1.42% 1.93% 1.33% 1.93% 0.84% Diagnoses (Add-On) Alzheimers % 50.47% 57.33% 42.17% 57.33% 48.18% Mental Illness % 11.11% 10.92% 9.46% 10.92% 8.84% Frail Elderly Composite $2, $2, $2, $2, $2, $2, $2, /14/2015 Milliman, Inc. Page 3 of 4

62 Exhibit D3Biv June 2015 Expansion Population MCO/GSR Functional Screen Attribute Distribution Frail Elderly Variable Statewide Estimate Care WI (GSR 13) LCD (GSR 13) Intercept (Grid Component) % % DD/NH Level of Care (Grid Component) Vent Dependent % 0.11% SNF % 14.85% Number of IADLs (Grid Component) IADL_ % 8.01% IADL_ % 28.53% IADL_ % 62.61% Specific ADLs / Equipment Used (Add-On) Bathing_ % 40.06% Bathing_ % 52.99% Toileting_ % 28.21% Toileting_ % 19.23% Transfer_ % 18.91% Interaction Terms (Add-On) Bath_Equip_Eat % 27.56% Transfer_Equip_Mobility % 4.49% Seizure Post-22_Schizophrenia % 0.00% Injury_Overnight 1, % 0.11% Behavioral Variables (Add-On) Mental Health_ % 37.61% Offensive_ % 1.28% Offensive_ % 0.53% Offensive_ % 0.00% Alcohol Drug Abuse % 3.21% Wander_ % 1.92% Health Related Services (Add-On) Exercise % 4.17% Med Management % 16.99% Overnight % 56.41% Reposition % 2.35% Respirate % 4.81% Tube Feedings % 0.11% Ulcer Stage % 0.64% Diagnoses (Add-On) Alzheimers % 42.74% Mental Illness % 6.94% Frail Elderly Composite $2, $2, $2, /14/2015 Milliman, Inc. Page 4 of 4

63 Exhibit E1 Development of Service Portion of LTC Rate Nursing Home Level of Care Base Cohort MCO/GSR Specific Base Rate Development Projection to CY 2016 DD 2016 Projected Regression Results MCO/GSR Specific 2016 DD Adjustment Factors Projected Per Development Exposure Months Statewide DD Base Cohort Risk Score - June 2015 Risk Adjusted Rate Two-Year Util Two-Year Unit One-Year Acuity Costs Screens Trend Cost Trend Trend Wage Index Phase-In Capita Monthly Costs Care WI (GSR 2) 990 $3, $3, $3, Care WI (GSR 5) 15,476 3, , , Care WI (GSR 5-6) 8,882 3, , , Care WI (GSR 6) 613 3, , , CCCW (GSR 4) 18,913 3, , , CCCW (GSR 7) 11,181 3, , , CCI (GSR 5-6) 6,871 3, , , CCI (GSR 6) 11,596 3, , , CCI (GSR 8) 11,101 3, , , CCI (GSR 10) 10,368 3, , , CCI (GSR 11) 13,141 3, , , ContinuUs (GSR 1) 12,928 3, , , ContinuUs (GSR 3) 11,458 3, , , LCD (GSR 9) 14,250 3, , , MCDFC (GSR 8) 23,784 3, , , MCDFC (GSR 11) 799 3, , , WWC (GSR 2) 17,881 3, , , Total DD Base Cohort 190,233 $3, $3, $3, Non-Base Cohort MCO/GSR Specific Expansion Rate Development Projection to CY 2016 DD 2016 Projected Regression Results MCO/GSR Specific 2016 DD Adjustment Factors Projected Per Development Exposure Months Statewide DD Non-Base Risk Score - June 2015 Risk Adjusted Rate Two-Year Util Two-Year Unit One-Year Acuity Cohort Costs Screens Trend Cost Trend Trend Wage Index Phase-In Capita Monthly Costs CCI (GSR 9) 244 $3, $3, $3, ContinuUs (GSR 5) 321 3, , , ContinuUs (GSR 5-6) 90 3, , , LCD (GSR 10) 428 3, , , MCDFC (GSR 5-6) 139 3, , , MCDFC (GSR 6) 114 3, , , Total DD Non-Base Cohort 1,335 $3, $3, $3, Expansion Cohort MCO/GSR Specific Waiver/Waitlist Rate Development Projection to CY 2016 DD 2016 Projected Regression Results MCO/GSR Specific 2016 DD Adjustment Factors Projected Per Development Exposure Months Statewide DD Expansion Risk Score - June 2015 Risk Adjusted Rate Two-Year Util Two-Year Unit One-Year Acuity Cohort Costs Screens Trend Cost Trend Trend Wage Index Phase-In Capita Monthly Costs Care WI (GSR 13) 9,610 $3, $3, $3, LCD (GSR 13) 9,530 3, , , Total DD 2015 Expansion Cohort 19,140 $3, $3, $3, /14/2015 Milliman, Inc. Page 1 of 4

64 Exhibit E1 Development of Service Portion of LTC Rate Nursing Home Level of Care Base Cohort MCO/GSR Specific Base Rate Development Projection to CY 2016 PD 2016 Projected Regression Results MCO/GSR Specific 2016 PD Adjustment Factors Projected Per Development Exposure Months Statewide PD Base Cohort Risk Score - June 2015 Risk Adjusted Rate Two-Year Util Two-Year Unit One-Year Acuity Costs Screens Trend Cost Trend Trend Wage Index Phase-In Capita Monthly Costs Care WI (GSR 2) 1,424 $2, $2, $2, Care WI (GSR 5) 6,009 2, , , Care WI (GSR 5-6) 3,423 2, , , Care WI (GSR 6) 699 2, , , CCCW (GSR 4) 9,833 2, , , CCCW (GSR 7) 6,404 2, , , CCI (GSR 5-6) 2,971 2, , , CCI (GSR 6) 4,151 2, , , CCI (GSR 8) 11,099 2, , , CCI (GSR 10) 3,626 2, , , CCI (GSR 11) 7,305 2, , , ContinuUs (GSR 1) 8,587 2, , , ContinuUs (GSR 3) 7,734 2, , , LCD (GSR 9) 9,599 2, , , MCDFC (GSR 8) 40,870 2, , , MCDFC (GSR 11) 1,048 2, , , WWC (GSR 2) 14,574 2, , , Total PD Base Cohort 139,354 $2, $2, $2, Non-Base Cohort MCO/GSR Specific Expansion Rate Development Projection to CY 2016 PD 2016 Projected Regression Results MCO/GSR Specific 2016 PD Adjustment Factors Projected Per Development Exposure Months Statewide PD Non-Base Risk Score - June 2015 Risk Adjusted Rate Two-Year Util Two-Year Unit One-Year Acuity Cohort Costs Screens Trend Cost Trend Trend Wage Index Phase-In Capita Monthly Costs CCI (GSR 9) 303 $2, $2, $2, ContinuUs (GSR 5) 333 2, , , ContinuUs (GSR 5-6) 133 2, , , LCD (GSR 10) 223 2, , , MCDFC (GSR 5-6) 271 2, , , MCDFC (GSR 6) 128 2, , , Total PD Non-Base Cohort 1,392 $2, $2, $2, Expansion Cohort MCO/GSR Specific Waiver/Waitlist Rate Development Projection to CY 2016 PD 2016 Projected Regression Results MCO/GSR Specific 2016 PD Adjustment Factors Projected Per Development Exposure Months Statewide PD Expansion Risk Score - June 2015 Risk Adjusted Rate Two-Year Util Two-Year Unit One-Year Acuity Cohort Costs Screens Trend Cost Trend Trend Wage Index Phase-In Capita Monthly Costs Care WI (GSR 13) 3,881 $2, $2, $2, LCD (GSR 13) 3,826 2, , , Total PD 2015 Expansion Cohort 7,707 $2, $2, $2, /14/2015 Milliman, Inc. Page 2 of 4

65 Exhibit E1 Development of Service Portion of LTC Rate Nursing Home Level of Care Base Cohort MCO/GSR Specific Base Rate Development Projection to CY 2016 FE 2016 Projected Regression Results MCO/GSR Specific 2016 FE Adjustment Factors Projected Per Development Exposure Months Statewide FE Base Cohort Risk Score - June 2015 Risk Adjusted Rate Two-Year Util Two-Year Unit One-Year Acuity Costs Screens Trend Cost Trend Trend Wage Index Phase-In Capita Monthly Costs Care WI (GSR 2) 622 $2, $2, $2, Care WI (GSR 5) 5,699 2, , , Care WI (GSR 5-6) 5,821 2, , , Care WI (GSR 6) 938 2, , , CCCW (GSR 4) 12,860 2, , , CCCW (GSR 7) 7,667 2, , , CCI (GSR 5-6) 4,186 2, , , CCI (GSR 6) 6,198 2, , , CCI (GSR 8) 3,987 2, , , CCI (GSR 10) 5,701 2, , , CCI (GSR 11) 5,955 2, , , ContinuUs (GSR 1) 8,539 2, , , ContinuUs (GSR 3) 6,917 2, , , LCD (GSR 9) 6,070 2, , , MCDFC (GSR 8) 31,469 2, , , MCDFC (GSR 11) 581 2, , , WWC (GSR 2) 12,065 2, , , Total FE Base Cohort 125,275 $2, $2, $2, Non-Base Cohort MCO/GSR Specific Expansion Rate Development Projection to CY 2016 FE 2016 Projected Regression Results MCO/GSR Specific 2016 FE Adjustment Factors Projected Per Development Exposure Months Statewide FE Non-Base Risk Score - June 2015 Risk Adjusted Rate Two-Year Util Two-Year Unit One-Year Acuity Cohort Costs Screens Trend Cost Trend Trend Wage Index Phase-In Capita Monthly Costs CCI (GSR 9) 356 $2, $2, $2, ContinuUs (GSR 5) 258 2, , , ContinuUs (GSR 5-6) 70 2, , , LCD (GSR 10) 304 2, , , MCDFC (GSR 5-6) 329 2, , , MCDFC (GSR 6) 70 2, , , Total FE Non-Base Cohort 1,386 $2, $2, $2, Expansion Cohort MCO/GSR Specific Waiver/Waitlist Rate Development Projection to CY 2016 FE 2016 Projected Regression Results MCO/GSR Specific 2016 FE Adjustment Factors Projected Per Development Exposure Months Statewide FE Expansion Risk Score - June 2015 Risk Adjusted Rate Two-Year Util Two-Year Unit One-Year Acuity Capita Monthly Costs Cohort Costs Screens Trend Cost Trend Trend Wage Index Phase-In Care WI (GSR 13) 4,781 $2, $2, $2, LCD (GSR 13) 4,707 2, , , Total FE 2015 Expansion Cohort 9,488 $2, $2, $2, /14/2015 Milliman, Inc. Page 3 of 4

66 Exhibit E1 Development of Service Portion of LTC Rate Nursing Home Level of Care Base Cohort 2016 Projected Regression Results MCO/GSR Specific 2016 Base Cohort Adjustment Factors Projected Per Composite Exposure Months Statewide Base Cohort Risk Score - June 2015 Risk Adjusted Rate Two-Year Util Two-Year Unit One-Year Acuity Costs Screens Trend Cost Trend Trend Wage Index Phase-In Capita Monthly Costs Care WI (GSR 2) 3,036 $2, $2, $2, Care WI (GSR 5) 27,184 3, , , Care WI (GSR 5-6) 18,126 2, , , Care WI (GSR 6) 2,249 2, , , CCCW (GSR 4) 41,606 2, , , CCCW (GSR 7) 25,251 2, , , CCI (GSR 5-6) 14,027 2, , , CCI (GSR 6) 21,944 2, , , CCI (GSR 8) 26,187 2, , , CCI (GSR 10) 19,694 2, , , CCI (GSR 11) 26,401 2, , , ContinuUs (GSR 1) 30,055 2, , , ContinuUs (GSR 3) 26,109 2, , , LCD (GSR 9) 29,920 2, , , MCDFC (GSR 8) 96,123 2, , , MCDFC (GSR 11) 2,429 2, , , WWC (GSR 2) 44,520 2, , , Total Base Cohort 454,862 $2, $2, $2, Non-Base Cohort 2016 Projected Regression Results MCO/GSR Specific 2016 Non-Base Cohort Adjustment Factors Projected Per Composite Exposure Months Statewide Non-Base Cohort Risk Score - June 2015 Risk Adjusted Rate Two-Year Util Two-Year Unit One-Year Acuity Costs Screens Trend Cost Trend Trend Wage Index Phase-In Capita Monthly Costs CCI (GSR 9) 903 $2, $2, $2, ContinuUs (GSR 5) 912 2, , , ContinuUs (GSR 5-6) 293 2, , , LCD (GSR 10) 954 2, , , MCDFC (GSR 5-6) 739 2, , , MCDFC (GSR 6) 313 2, , , Total Non-Base Cohort 4,114 $2, $2, $3, Expansion Cohort 2016 Projected Regression Results MCO/GSR Specific Expansion Cohort Adjustment Factors Projected Per Composite Exposure Months Statewide 2015 Expansion Risk Score - June 2015 Risk Adjusted Rate Two-Year Util Two-Year Unit One-Year Acuity Cohort Costs Screens Trend Cost Trend Trend Wage Index Phase-In Capita Monthly Costs Care WI (GSR 13) 18,272 $2, $2, $3, LCD (GSR 13) 18,062 2, , , Total 2015 Expansion Cohort 36,335 $2, $2, $3, /14/2015 Milliman, Inc. Page 4 of 4

67 Exhibit E2 Development of Service Portion of LTC Rate Nursing Home Level of Care Base Cohort Application of HCRP Policy Adjustments Policy Adjusted Market Draft CY 2016 DD Projected Per HCRP Projected Per New CY Projected Variability Projected Development Capita Monthly Costs Pooled Claims Capita Monthly Costs w/ HCRP¹ LTC Benefits Service Costs Adjustment Service Costs Care WI (GSR 2) $3, $23.18 $3, $0.67 $3, $3, Care WI (GSR 5) 3, , , , Care WI (GSR 5-6) 3, , , , Care WI (GSR 6) 3, , , , CCCW (GSR 4) 3, , , , CCCW (GSR 7) 3, , , , CCI (GSR 5-6) 3, , , , CCI (GSR 6) 3, , , , CCI (GSR 8) 3, , , , CCI (GSR 10) 3, , , , CCI (GSR 11) 3, , , , ContinuUs (GSR 1) 3, , , , ContinuUs (GSR 3) 3, , , , LCD (GSR 9) 3, , , , MCDFC (GSR 8) 3, , , , MCDFC (GSR 11) 3, , , , WWC (GSR 2) 3, , , , Total DD Base Cohort $3, $23.18 $3, $0.67 $3, $3, Non-Base Cohort Application of HCRP Policy Adjustments Policy Adjusted Market Draft CY 2016 DD Projected Per HCRP Projected Per New CY Projected Variability Projected Development Pooled Claims Capita Monthly Costs w/ LTC Benefits Service Costs Adjustment Service Costs Capita Monthly Costs HCRP¹ CCI (GSR 9) $3, $23.18 $3, $0.67 $3, $3, ContinuUs (GSR 5) 3, , , , ContinuUs (GSR 5-6) 3, , , , LCD (GSR 10) 3, , , , MCDFC (GSR 5-6) 3, , , , MCDFC (GSR 6) 3, , , , Total DD Non-Base Cohort $3, $23.18 $3, $0.67 $3, $3, Expansion Cohort Application of HCRP Policy Adjustments Policy Adjusted Market Draft CY 2016 DD Projected Per HCRP Projected Per New CY Projected Variability Projected Development Capita Monthly Costs Pooled Claims Capita Monthly Costs w/ LTC Benefits Service Costs Adjustment Service Costs HCRP¹ Care WI (GSR 13) $3, $23.18 $3, $0.67 $3, $3, LCD (GSR 13) 3, , , , Total DD 2015 Expansion Cohort $3, $23.18 $3, $0.67 $3, $3, ¹ The 'projected per capita monthy costs w/ HCRP' represents the service portion of the MCE rate. 12/14/2015 Milliman, Inc. Page 1 of 4

68 Exhibit E2 Development of Service Portion of LTC Rate Nursing Home Level of Care Base Cohort Application of HCRP Policy Adjustments Policy Adjusted Market Draft CY 2016 PD Projected Per HCRP Projected Per New CY Projected Variability Projected Development Pooled Claims Capita Monthly Costs w/ LTC Benefits Service Costs Adjustment Service Costs Capita Monthly Costs HCRP¹ Care WI (GSR 2) $2, $3.35 $2, $0.67 $2, $2, Care WI (GSR 5) 2, , , , Care WI (GSR 5-6) 3, , , , Care WI (GSR 6) 2, , , , CCCW (GSR 4) 2, , , , CCCW (GSR 7) 2, , , , CCI (GSR 5-6) 2, , , , CCI (GSR 6) 2, , , , CCI (GSR 8) 2, , , , CCI (GSR 10) 2, , , , CCI (GSR 11) 2, , , , ContinuUs (GSR 1) 2, , , , ContinuUs (GSR 3) 2, , , , LCD (GSR 9) 2, , , , MCDFC (GSR 8) 2, , , , MCDFC (GSR 11) 2, , , , WWC (GSR 2) 2, , , , Total PD Base Cohort $2, $3.35 $2, $0.67 $2, $2, Non-Base Cohort Application of HCRP Policy Adjustments Policy Adjusted Market Draft CY 2016 PD Projected Per HCRP Projected Per New CY Projected Variability Projected Development Pooled Claims Capita Monthly Costs w/ LTC Benefits Service Costs Adjustment Service Costs Capita Monthly Costs HCRP¹ CCI (GSR 9) $2, $3.35 $2, $0.67 $2, $2, ContinuUs (GSR 5) 2, , , , ContinuUs (GSR 5-6) 2, , , , LCD (GSR 10) 2, , , , MCDFC (GSR 5-6) 2, , , , MCDFC (GSR 6) 2, , , , Total PD Non-Base Cohort $2, $3.35 $2, $0.67 $2, $2, Expansion Cohort Application of HCRP Policy Adjustments Policy Adjusted Market Draft CY 2016 PD Projected Per HCRP Projected Per New CY Projected Variability Projected Development Capita Monthly Costs Pooled Claims Capita Monthly Costs w/ LTC Benefits Service Costs Adjustment Service Costs HCRP¹ Care WI (GSR 13) $2, $3.35 $2, $0.67 $2, $2, LCD (GSR 13) 2, , , , Total PD 2015 Expansion Cohort $2, $3.35 $2, $0.67 $2, $2, ¹ The 'projected per capita monthy costs w/ HCRP' represents the service portion of the MCE rate. 12/14/2015 Milliman, Inc. Page 2 of 4

69 Exhibit E2 Development of Service Portion of LTC Rate Nursing Home Level of Care Base Cohort Application of HCRP Policy Adjustments Policy Adjusted Market Draft CY 2016 FE Projected Per HCRP Projected Per New CY Projected Variability Projected Development Pooled Claims Capita Monthly Costs w/ LTC Benefits Service Costs Adjustment Service Costs Capita Monthly Costs HCRP¹ Care WI (GSR 2) $2, $0.00 $2, $0.67 $2, $2, Care WI (GSR 5) 2, , , , Care WI (GSR 5-6) 2, , , , Care WI (GSR 6) 2, , , , CCCW (GSR 4) 2, , , , CCCW (GSR 7) 2, , , , CCI (GSR 5-6) 2, , , , CCI (GSR 6) 2, , , , CCI (GSR 8) 2, , , , CCI (GSR 10) 2, , , , CCI (GSR 11) 2, , , , ContinuUs (GSR 1) 2, , , , ContinuUs (GSR 3) 2, , , , LCD (GSR 9) 2, , , , MCDFC (GSR 8) 2, , , , MCDFC (GSR 11) 2, , , , WWC (GSR 2) 2, , , , Total FE Base Cohort $2, $0.00 $2, $0.67 $2, $2, Non-Base Cohort Application of HCRP Policy Adjustments Policy Adjusted Market Draft CY 2016 FE Projected Per HCRP Projected Per New CY Projected Variability Projected Development Pooled Claims Capita Monthly Costs w/ LTC Benefits Service Costs Adjustment Service Costs Capita Monthly Costs HCRP¹ CCI (GSR 9) $2, $0.00 $2, $0.67 $2, $2, ContinuUs (GSR 5) 2, , , , ContinuUs (GSR 5-6) 2, , , , LCD (GSR 10) 2, , , , MCDFC (GSR 5-6) 2, , , , MCDFC (GSR 6) 2, , , , Total FE Non-Base Cohort $2, $0.00 $2, $0.67 $2, $2, Expansion Cohort Application of HCRP Policy Adjustments Policy Adjusted Market Draft CY 2016 FE Projected Per HCRP Projected Per New CY Projected Variability Projected Development Capita Monthly Costs Pooled Claims Capita Monthly Costs w/ LTC Benefits Service Costs Adjustment Service Costs HCRP¹ Care WI (GSR 13) $2, $0.00 $2, $0.67 $2, $2, LCD (GSR 13) 2, , , , Total FE 2015 Expansion Cohort $2, $0.00 $2, $0.67 $2, $2, ¹ The 'projected per capita monthy costs w/ HCRP' represents the service portion of the MCE rate. 12/14/2015 Milliman, Inc. Page 3 of 4

70 Exhibit E2 Development of Service Portion of LTC Rate Nursing Home Level of Care Base Cohort Projected Per HCRP Projected Per Policy Adjustments Policy Adjusted Market Draft CY 2016 Composite Pooled Claims Capita Monthly Costs w/ New LTC Benefits CY Projected Service Variability Capita Monthly Costs HCRP¹ Costs Adjustment Projected Service Costs Care WI (GSR 2) $2, $9.13 $2, $0.67 $2, $2, Care WI (GSR 5) 3, , , , Care WI (GSR 5-6) 3, , , , Care WI (GSR 6) 2, , , , CCCW (GSR 4) 2, , , , CCCW (GSR 7) 2, , , , CCI (GSR 5-6) 3, , , , CCI (GSR 6) 3, , , , CCI (GSR 8) 2, , , , CCI (GSR 10) 3, , , , CCI (GSR 11) 3, , , , ContinuUs (GSR 1) 3, , , , ContinuUs (GSR 3) 2, , , , LCD (GSR 9) 3, , , , MCDFC (GSR 8) 2, , , , MCDFC (GSR 11) 3, , , , WWC (GSR 2) 2, , , , Total Base Cohort $2, $10.72 $2, $0.67 $2, $2, Non-Base Cohort Projected Per HCRP Projected Per Policy Adjustments Policy Adjusted Market Draft CY 2016 Composite Pooled Claims Capita Monthly Costs w/ New LTC Benefits CY Projected Service Variability Capita Monthly Costs HCRP¹ Costs Adjustment Projected Service Costs CCI (GSR 9) $2, $7.39 $2, $0.67 $2, $2, ContinuUs (GSR 5) 3, , , , ContinuUs (GSR 5-6) 3, , , , LCD (GSR 10) 2, , , , MCDFC (GSR 5-6) 3, , , , MCDFC (GSR 6) 2, , , , Total Non-Base Cohort $3, $8.66 $3, $0.67 $3, $3, Expansion Cohort Projected Per HCRP Projected Per Policy Adjustments Policy Adjusted Market Draft CY 2016 Composite Pooled Claims Capita Monthly Costs w/ New LTC Benefits CY Projected Service Variability Capita Monthly Costs HCRP¹ Costs Adjustment Projected Service Costs Care WI (GSR 13) $3, $12.90 $3, $0.67 $3, $3, LCD (GSR 13) 3, , , , Total 2015 Expansion Cohort $3, $12.92 $3, $0.67 $3, $3, ¹ The 'projected per capita monthy costs w/ HCRP' represents the service portion of the MCE rate. 12/14/2015 Milliman, Inc. Page 4 of 4

71 Exhibit F Development of Non-Service Portion of LTC Rate, MCE, and Final Capitation Rates Nursing Home Level of Care Base Cohort 2016 Projected Projected Draft 2016 Projected Draft MCE Implied Targeted Targeted MCE Final CY 2016 Final CY 2016 Development Exposure MCE CY 2016 Administrative OCI Add-On Administrative Administrative Margin Margin PMPM Rates Capitation Capitation Rate Months Service Costs¹ Service Costs Expense Allowance² Percentage Rate Less HCRP Care WI (GSR 2) 3,036 $2, $2, $ $0.55 $ % 0.5% $14.26 $2, $2, $2, Care WI (GSR 5) 27,184 3, , % 0.5% , , , Care WI (GSR 5-6) 18,126 3, , % 0.5% , , , Care WI (GSR 6) 2,249 2, , % 0.5% , , , CCCW (GSR 4) 41,606 2, , % 0.5% , , , CCCW (GSR 7) 25,251 2, , % 0.5% , , , CCI (GSR 5-6) 14,027 3, , % 0.5% , , , CCI (GSR 6) 21,944 3, , % 0.5% , , , CCI (GSR 8) 26,187 2, , % 0.5% , , , CCI (GSR 10) 19,694 3, , % 0.5% , , , CCI (GSR 11) 26,401 3, , % 0.5% , , , ContinuUs (GSR 1) 30,055 3, , % 0.5% , , , ContinuUs (GSR 3) 26,109 2, , % 0.5% , , , LCD (GSR 9) 29,920 3, , % 0.5% , , , MCDFC (GSR 8) 96,123 2, , % 0.5% , , , MCDFC (GSR 11) 2,429 3, , % 0.5% , , , WWC (GSR 2) 44,520 2, , % 0.5% , , , Total Base Cohort 454,862 $2, $2, $ $0.55 $ % 0.5% $15.65 $3, $3, $3, Non-Base Cohort 2016 Projected Projected Draft 2016 Projected Draft MCE Implied Targeted Targeted MCE Final CY 2016 Final CY 2016 Development Exposure MCE CY 2016 Administrative OCI Add-On Administrative Administrative Margin Margin PMPM Rates Capitation Capitation Rate Months Service Costs Service Costs Expense Allowance² Percentage Rate Less HCRP CCI (GSR 9) 903 $2, $2, $ $0.55 $ % 0.5% $15.22 $3, $3, $3, ContinuUs (GSR 5) 912 3, , % 0.5% , , , ContinuUs (GSR 5-6) 293 3, , % 0.5% , , , LCD (GSR 10) 954 2, , % 0.5% , , , MCDFC (GSR 5-6) 739 3, , % 0.5% , , , MCDFC (GSR 6) 313 2, , % 0.5% , , , Total Non-Base Cohort 4,114 $3, $3, $ $0.55 $ % 0.5% $15.91 $3, $3, $3, Expansion Cohort 2016 Projected Projected Draft 2016 Projected Draft MCE Implied Targeted Targeted MCE Final CY 2016 Final CY 2016 Development Exposure MCE CY 2016 Administrative OCI Add-On Administrative Administrative Margin Margin PMPM Rates Capitation Capitation Rate Months Service Costs Service Costs Expense Allowance² Percentage Rate Less HCRP Care WI (GSR 13) 18,272 $3, $3, $ $0.55 $ % 0.5% $ $3, $3, LCD (GSR 13) 18,062 3, , % 0.5% , , , Total 2015 Expansion 36,335 $3, $3, $ $0.55 $ % 0.5% $16.30 $3, $3, $3, ¹ The 'projected MCE service costs' represents the service portion of the MCE rate. ² The 'draft MCE administrative allowance' represents the non-service portion of the MCE rate. 12/14/2015 Milliman, Inc. Page 1 of 1

72 Exhibit G Monthly and Daily Rates Nursing Home Level of Care 2016 Projected Exposure Months Monthly Rates Daily Rates MCO / GSR DD PD FE Total Net LTC Distribution Admin / Margin Distribution HCRP Rate Total Rate Total Rate Net of HCRP Net LTC Distribution Admin / Margin Distribution HCRP Rate Total Rate Total Rate Net of HCRP Care WI (GSR 2) 990 1, ,036 $2, $ $9.13 $2, $2, $ $ $ $ $ Care WI (GSR 5) 15,476 6,009 5,699 27,184 3, , , Care WI (GSR 5-6) 8,882 3,423 5,821 18,126 3, , , Care WI (GSR 6) ,249 2, , , Care WI (GSR 13) 9,610 3,881 4,781 18,272 3, , , CCCW (GSR 4) 18,913 9,833 12,860 41,606 2, , , CCCW (GSR 7) 11,181 6,404 7,667 25,251 2, , , CCI (GSR 5-6) 6,871 2,971 4,186 14,027 3, , , CCI (GSR 6) 11,596 4,151 6,198 21,944 3, , , CCI (GSR 8) 11,101 11,099 3,987 26,187 2, , , CCI (GSR 9) , , , CCI (GSR 10) 10,368 3,626 5,701 19,694 3, , , CCI (GSR 11) 13,141 7,305 5,955 26,401 3, , , ContinuUs (GSR 1) 12,928 8,587 8,539 30,055 3, , , ContinuUs (GSR 3) 11,458 7,734 6,917 26,109 2, , , ContinuUs (GSR 5) , , , ContinuUs (GSR 5-6) , , , LCD (GSR 9) 14,250 9,599 6,070 29,920 3, , , LCD (GSR 10) , , , LCD (GSR 13) 9,530 3,826 4,707 18,062 3, , , MCDFC (GSR 5-6) , , , MCDFC (GSR 6) , , , MCDFC (GSR 8) 23,784 40,870 31,469 96,123 2, , , MCDFC (GSR 11) 799 1, ,429 2, , , WWC (GSR 2) 17,881 14,574 12,065 44,520 2, , , /14/2015 Milliman, Inc. Page 1 of 1

73 Milliman Client Report Exhibit H - N Capitation Rate Development Non-Nursing Home Level of Care State of CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

74 Exhibit H Summary of 2014 Actual Experience by MCO¹ Non-Nursing Home Level of Care Care WI (GSR 2) Care WI (GSR 5) Care WI (GSR 5-6) Care WI (GSR 6) DD PD FE DD PD FE DD PD FE DD PD FE Exposure Months State Plan Services Adaptive Equipment $27.38 $48.27 $26.49 $1.80 $39.22 $0.23 $5.83 $6.75 $0.00 $6.69 $21.68 $62.27 Adult Day Activities Case Management Habilitation/Health Home Care Home Health Care Housing Institutional Other Residential Care Respite Care Transportation Vocational Total State Plan Services $ $ $ $ $ $ $ $ $0.00 $ $ $1, Room and Board Room and Board Collections Room and Board Costs Total Room and Board $0.00 $2.02 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Grand Total $ $ $ $ $ $ $ $ $0.00 $ $ $1, Composite PMPM $ $ $ $ ¹ Claim summaries presented in this exhibit are net of the costs related to non-covered services that are not cost effective in comparison with their corresponding covered service, as presented in the rate memorandum. 12/14/2015 Milliman, Inc. Page 1 of 5

75 Exhibit H Summary of 2014 Actual Experience by MCO¹ Non-Nursing Home Level of Care CCCW (GSR 4) CCCW (GSR 7) CCI (GSR 6) CCI (GSR 5-6) DD PD FE DD PD FE DD PD FE DD PD FE Exposure Months 668 1, State Plan Services Adaptive Equipment $7.22 $30.21 $28.13 $3.24 $39.91 $19.88 $3.44 $37.44 $0.00 $10.18 $8.69 $30.12 Adult Day Activities Case Management Habilitation/Health Home Care Home Health Care Housing Institutional Other Residential Care , Respite Care Transportation Vocational Total State Plan Services $ $ $ $ $ $ $ $ $1, $ $ $4, Room and Board Room and Board Collections - - (4.47) (61.49) - - (748.75) Room and Board Costs Total Room and Board $0.00 $0.00 -$0.56 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $1.98 Grand Total $ $ $ $ $ $ $ $ $1, $ $ $4, Composite PMPM $ $ $ $ ¹ Claim summaries presented in this exhibit are net of the costs related to non-covered services that are not cost effective in comparison with their corresponding covered service, as presented in the rate memorandum. 12/14/2015 Milliman, Inc. Page 2 of 5

76 Exhibit H Summary of 2014 Actual Experience by MCO¹ Non-Nursing Home Level of Care CCI (GSR 8) CCI (GSR 10) CCI (GSR 11) ContinuUs (GSR 1) DD PD FE DD PD FE DD PD FE DD PD FE Exposure Months State Plan Services Adaptive Equipment $1.87 $29.50 $45.45 $59.35 $33.70 $40.03 $8.81 $19.83 $42.75 $7.44 $44.74 $12.51 Adult Day Activities Case Management Habilitation/Health Home Care Home Health Care Housing Institutional Other Residential Care Respite Care Transportation Vocational Total State Plan Services $ $ $ $ $ $ $ $ $ $ $ $ Room and Board Room and Board Collections (54.26) - - (47.62) - - (8.17) Room and Board Costs Total Room and Board $6.34 $0.07 $0.00 $0.00 $0.00 $0.15 $16.13 $0.00 $83.52 $0.00 $0.00 $2.04 Grand Total $ $ $ $ $ $ $ $ $ $ $ $ Composite PMPM $ $ $ $ ¹ Claim summaries presented in this exhibit are net of the costs related to non-covered services that are not cost effective in comparison with their corresponding covered service, as presented in the rate memorandum. 12/14/2015 Milliman, Inc. Page 3 of 5

77 Exhibit H Summary of 2014 Actual Experience by MCO¹ Non-Nursing Home Level of Care ContinuUs (GSR 3) LCD (GSR 9) MCDFC (GSR 8) MCDFC (GSR 11) DD PD FE DD PD FE DD PD FE DD PD FE Exposure Months 349 1, , State Plan Services Adaptive Equipment $9.33 $44.11 $19.74 $4.24 $34.33 $8.36 $4.70 $17.63 $22.32 $0.00 $ $0.00 Adult Day Activities Case Management Habilitation/Health Home Care Home Health Care Housing Institutional Other Residential Care Respite Care Transportation Vocational Total State Plan Services $ $ $ $ $ $ $ $ $ $ $1, $ Room and Board Room and Board Collections (1.54) Room and Board Costs Total Room and Board $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.40 $0.00 $0.00 $0.00 $0.00 Grand Total $ $ $ $ $ $ $ $ $ $ $1, $ Composite PMPM $ $ $ $1, ¹ Claim summaries presented in this exhibit are net of the costs related to non-covered services that are not cost effective in comparison with their corresponding covered service, as presented in the rate memorandum. 12/14/2015 Milliman, Inc. Page 4 of 5

78 WWC (GSR 2) Exhibit H Summary of 2014 Actual Experience by MCO¹ Non-Nursing Home Level of Care Grand Total - Base Data DD PD FE DD PD FE Exposure Months 328 1, ,501 9,711 1,383 State Plan Services Adaptive Equipment $1.58 $31.18 $6.71 $6.88 $33.34 $20.08 Adult Day Activities Case Management Habilitation/Health Home Care Home Health Care Housing Institutional Other Residential Care Respite Care Transportation Vocational Total State Plan Services $ $ $ $ $ $ Room and Board Room and Board Collections (0.21) (4.30) Room and Board Costs Total Room and Board $0.00 $0.00 $0.00 $0.58 $0.10 $0.72 Grand Total $ $ $ $ $ $ Composite PMPM $ $ ¹ Claim summaries presented in this exhibit are net of the costs related to non-covered services that are not cost effective in comparison with their corresponding covered service, as presented in the rate memorandum. 12/14/2015 Milliman, Inc. Page 5 of 5

79 Exhibit I 2014 Statewide Base Rate Development Non-Nursing Home Level of Care DD 2014 IBNR 2014 Statewide DD Development CY 2014 Base Adjustment Completed Net Base Costs Exposure Months Experience PMPM PMPM Care WI (GSR 2) 53 $ $ Care WI (GSR 5) Care WI (GSR 5-6) Care WI (GSR 6) CCCW (GSR 4) CCCW (GSR 7) CCI (GSR 5-6) CCI (GSR 6) CCI (GSR 8) CCI (GSR 10) CCI (GSR 11) ContinuUs (GSR 1) ContinuUs (GSR 3) LCD (GSR 9) MCDFC (GSR 8) MCDFC (GSR 11) WWC (GSR 2) Total DD Experience Data 3,501 $ $ PD 2014 IBNR 2014 Statewide PD Development CY 2014 Base Adjustment Completed Net Base Costs Exposure Months Experience PMPM PMPM Care WI (GSR 2) 213 $ $ Care WI (GSR 5) Care WI (GSR 5-6) Care WI (GSR 6) CCCW (GSR 4) 1, CCCW (GSR 7) CCI (GSR 5-6) CCI (GSR 6) CCI (GSR 8) CCI (GSR 10) CCI (GSR 11) ContinuUs (GSR 1) ContinuUs (GSR 3) 1, LCD (GSR 9) MCDFC (GSR 8) 1, MCDFC (GSR 11) 18 1, , WWC (GSR 2) 1, Total PD Experience Data 9,711 $ $ /14/2015 Milliman, Inc. Page 1of 2

80 Exhibit I 2014 Statewide Base Rate Development Non-Nursing Home Level of Care FE 2014 IBNR 2014 Statewide FE Development CY 2014 Base Adjustment Completed Net Base Costs Exposure Months Experience PMPM PMPM Care WI (GSR 2) 7 $ $ Care WI (GSR 5) Care WI (GSR 5-6) Care WI (GSR 6) 9 1, , CCCW (GSR 4) CCCW (GSR 7) CCI (GSR 5-6) 2 4, , CCI (GSR 6) 5 1, , CCI (GSR 8) CCI (GSR 10) CCI (GSR 11) ContinuUs (GSR 1) ContinuUs (GSR 3) LCD (GSR 9) MCDFC (GSR 8) MCDFC (GSR 11) WWC (GSR 2) Total FE Experience Data 1,383 $ $ Composite 2014 IBNR 2014 Statewide CY 2014 Base Adjustment Completed Net Base Costs Exposure Months Experience PMPM PMPM Care WI (GSR 2) 273 $ $ Care WI (GSR 5) Care WI (GSR 5-6) Care WI (GSR 6) CCCW (GSR 4) 2, CCCW (GSR 7) CCI (GSR 5-6) CCI (GSR 6) CCI (GSR 8) CCI (GSR 10) CCI (GSR 11) ContinuUs (GSR 1) 1, ContinuUs (GSR 3) 2, LCD (GSR 9) 1, MCDFC (GSR 8) 1, MCDFC (GSR 11) 21 1, , WWC (GSR 2) 1, Total Experience Data 14,595 $ $ /14/2015 Milliman, Inc. Page 2of 2

81 Exhibit J Illustration of Functional Based PMPMs and Membership Distributions Non-Nursing Home Level of Care Functional PMPM Calculation Low IADL, Low ADL Low IADL, High ADL High IADL, Low ADL High IADL, High ADL Composite 2014 MM Mix Total Base Period Claims $5,265,285 $632,122 $864,213 $97,086 $6,858,706 Non Covered Services Adjustment 98.14% 97.95% 97.27% 97.09% 98.00% Claims Adjusted for Covered Services 5,167, , ,635 94,261 6,721,553 IBNR Adjustment Completed Claims 5,180, , ,733 94,496 6,738,327 Member Months 11,809 1,109 1, ,595 Functional Based PMPM $ $ $ $1, $ /14/2015 Milliman, Inc. Page 1 of 1

82 Exhibit K Illustration of Functional Based PMPMs and Membership Distributions Non-Nursing Home Level of Care Low IADL, Low Low IADL, High IADL, High IADL, Composite ADL High ADL Low ADL High ADL 2014 MM Mix Functional Based PMPM , Base 2016 Projected Membership Composite Cohort Low IADL, Low ADL Low IADL, High ADL High IADL, Low ADL High IADL, High ADL Functional PMPM Care WI (GSR 2) $ Care WI (GSR 5) Care WI (GSR 5-6) Care WI (GSR 6) CCCW (GSR 4) 1, CCCW (GSR 7) CCI (GSR 5-6) CCI (GSR 6) CCI (GSR 8) CCI (GSR 10) CCI (GSR 11) ContinuUs (GSR 1) ContinuUs (GSR 3) 2, LCD (GSR 9) MCDFC (GSR 8) 1, MCDFC (GSR 11) WWC (GSR 2) 1, Total Base Cohort 12,002 1,145 1, $ Non-Base 2016 Projected Membership Composite Cohort Low IADL, Low ADL Low IADL, High ADL High IADL, Low ADL High IADL, High ADL Functional PMPM CCI (GSR 9) $ ContinuUs (GSR 5) ContinuUs (GSR 5-6) LCD (GSR 10) MCDFC (GSR 5-6) MCDFC (GSR 6) Total Non-Base Cohort $ Expansion 2016 Projected Membership Composite Cohort Low IADL, Low ADL Low IADL, High ADL High IADL, Low ADL High IADL, High ADL Functional PMPM Care WI (GSR 13) $ LCD (GSR 13) Total 2015 Expansion Cohort $ /14/2015 Milliman, Inc. Page 1 of 1

83 Exhibit L Development of Service Portion of LTC Rate Non-Nursing Home Level of Care Base Cohort MCO/GSR Specific Base Rate Development Projection to CY 2016 Market Draft CY Projected MCO/GSR Specific 2016 Composite Adjustment Factors Projected Variability Projected Development Exposure Months Functional Rate Two-Year Utilization Two-Year Unit Cost Two-Year Acuity Per Capita Monthly Adjustment Service Costs Trend Trend Trend Wage Index Costs¹ Care WI (GSR 2) 442 $ $ $ Care WI (GSR 5) Care WI (GSR 5-6) Care WI (GSR 6) CCCW (GSR 4) 2, CCCW (GSR 7) CCI (GSR 5-6) CCI (GSR 6) CCI (GSR 8) CCI (GSR 10) CCI (GSR 11) ContinuUs (GSR 1) 1, ContinuUs (GSR 3) 2, LCD (GSR 9) MCDFC (GSR 8) 2, MCDFC (GSR 11) WWC (GSR 2) 1, Total 2016 Base Cohort 14,880 $ $ Non-Base Cohort MCO/GSR Specific Base Rate Development Projection to CY 2016 Market Draft CY Projected MCO/GSR Specific 2016 Composite Adjustment Factors Projected Variability Projected Development Exposure Months Functional Rate Two-Year Utilization Two-Year Unit Cost Two-Year Acuity Per Capita Monthly Adjustment Service Costs Trend Trend Trend Wage Index Costs¹ CCI (GSR 9) 151 $ $ $ ContinuUs (GSR 5) ContinuUs (GSR 5-6) LCD (GSR 10) MCDFC (GSR 5-6) MCDFC (GSR 6) Total 2016 Non-Base Cohort 434 $ $ Expansion Cohort MCO/GSR Specific Base Rate Development Projection to CY 2016 Market Draft CY Projected MCO/GSR Specific 2016 Composite Adjustment Factors Projected Variability Projected Development Exposure Months Functional Rate Two-Year Utilization Two-Year Unit Cost Two-Year Acuity Per Capita Monthly Adjustment Service Costs Trend Trend Trend Wage Index Costs¹ Care WI (GSR 13) 51 $ $ $ LCD (GSR 13) Total 2015 Expansion Cohort 102 $ $ ¹ The 'projected per capita monthy costs' represents the service portion of the MCE rate. 12/14/2015 Milliman, Inc. Page 1 of 1

84 Exhibit M Development of Non-Service Portion of LTC Rate, MCE, and Final Capitation Rates Non-Nursing Home Level of Care Base Cohort 2016 Projected Projected Draft MCE Implied Targeted Targeted MCE Final CY 2016 Development Exposure MCE CY 2016 Administrative Administrative Margin Margin PMPM Rates Capitation Months Service Costs¹ Service Costs Allowance² Percentage Rate Care WI (GSR 2) 442 $ $ $ % 0.5% $2.34 $ $ Care WI (GSR 5) % 0.5% Care WI (GSR 5-6) % 0.5% Care WI (GSR 6) % 0.5% CCCW (GSR 4) 2, % 0.5% CCCW (GSR 7) % 0.5% CCI (GSR 5-6) % 0.5% CCI (GSR 6) % 0.5% CCI (GSR 8) % 0.5% CCI (GSR 10) % 0.5% CCI (GSR 11) % 0.5% ContinuUs (GSR 1) 1, % 0.5% ContinuUs (GSR 3) 2, % 0.5% LCD (GSR 9) % 0.5% MCDFC (GSR 8) 2, % 0.5% MCDFC (GSR 11) % 0.5% WWC (GSR 2) 1, % 0.5% Total Base Cohort 14,880 $ $ % 0.5% $2.42 $ $ Non-Base Cohort 2016 Projected Projected Draft Draft MCE Implied Targeted Targeted MCE Final CY 2016 Development Exposure MCE CY 2016 Administrative Administrative Margin Margin PMPM Rates Capitation Months Service Costs¹ Service Costs Allowance² Percentage Rate CCI (GSR 9) 151 $ $ $ % 0.5% $2.41 $ $ ContinuUs (GSR 5) % 0.5% ContinuUs (GSR 5-6) % 0.5% LCD (GSR 10) % 0.5% MCDFC (GSR 5-6) % 0.5% MCDFC (GSR 6) % 0.5% Total Non-Base Cohort 434 $ $ % 0.5% $2.45 $ $ Expansion Cohort 2016 Projected Projected Draft Draft MCE Implied Targeted Targeted MCE Final CY 2016 Development Exposure MCE CY 2016 Administrative Administrative Margin Margin PMPM Rates Capitation Months Service Costs¹ Service Costs Allowance² Percentage Rate Care WI (GSR 13) 51 $ $ $ % 0.5% $2.36 $ $ LCD (GSR 13) % 0.5% Total 2015 Expansion Cohort 102 $ $ % 0.5% $2.36 $ $ ¹ The 'projected per capita monthy costs' represents the service portion of the MCE rate. ² The 'administrative expense allowance' represents the non-service portion of the MCE rate. 12/14/2015 Milliman, Inc. Page 1 of 1

85 Exhibit N Monthly and Daily Rates Non-Nursing Home Level of Care MCO / GSR Projected Monthly Rates Daily Rates 2016 Enrollment Net LTC Distribution Admin / Margin Distribution Total Rate Net LTC Distribution Admin / Margin Distribution Total Rate Care WI (GSR 2) 442 $ $24.89 $ $ $ $ Care WI (GSR 5) Care WI (GSR 5-6) Care WI (GSR 6) Care WI (GSR 13) CCCW (GSR 4) 2, CCCW (GSR 7) CCI (GSR 5-6) CCI (GSR 6) CCI (GSR 8) CCI (GSR 9) CCI (GSR 10) CCI (GSR 11) ContinuUs (GSR 1) 1, ContinuUs (GSR 3) 2, ContinuUs (GSR 5) ContinuUs (GSR 5-6) LCD (GSR 9) LCD (GSR 10) LCD (GSR 13) MCDFC (GSR 5-6) MCDFC (GSR 6) MCDFC (GSR 8) 2, MCDFC (GSR 11) WWC (GSR 2) 1, /14/2015 Milliman, Inc. Page 1 of 1

86 Milliman Client Report Exhibit O Actuarial Certification State of CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

87 15800 Bluemound Road Suite 100 Brookfield, WI USA Tel Fax milliman.com Michael C. Cook, FSA, MAAA Consulting Actuary December 14, 2015 Capitated Contracts Ratesetting Actuarial Certification January 2016 December 2016 Family Care Program Capitation Rates I, Michael C. Cook, am associated with the firm of Milliman, Inc., am a member of the American Academy of Actuaries, and meet its Qualification Standards for Statements of Actuarial Opinion. I was retained by the (DHS) to perform an actuarial certification of the Family Care program capitation rates for January 2016 December 2016 for filing with the Centers for Medicare and Medicaid Services (CMS). I reviewed the attached capitation rate development and am familiar with the Code of Federal Regulations, 42 CFR 438.6(c) and the CMS Appendix A, PAHP, PIHP, and MCO Contracts Financial Review Documentation for At-risk Capitated Contracts Ratesetting. I examined the actuarial assumptions and actuarial methods used in setting the capitation rates for January 2016 December To the best of my information, knowledge and belief, for the period from January 2016 December 2016, the capitation rates offered by DHS are in compliance with 42 CFR 438.6(c). The attached actuarial report describes the capitation rate setting methodology. In my opinion, the capitation rates are actuarially sound, as defined in ASOP 49, were developed in accordance with generally accepted actuarial principles and practices, and are appropriate for the populations to be covered and the services to be furnished under the contract. In making my opinion, I relied upon the accuracy of the underlying claims and eligibility data records and other information. A copy of the reliance letter received from DHS is attached and constitutes part of this opinion. I did not audit the data and calculations, but did review them for reasonableness and consistency and did not find material defects. In other respects, my examination included such review of the underlying assumptions and methods used and such tests of the calculations as I considered necessary. Actuarial methods, considerations, and analyses used in forming my opinion conform to the appropriate Standards of Practice as promulgated from time-to-time by the Actuarial Standards Board, whose standards form the basis of this Statement of Opinion. It should be emphasized that capitation rates are a projection of future costs based on a set of assumptions. Actual costs will be dependent on each contracted managed care organization s situation and experience.

88 Capitated Contracts Ratesetting Actuarial Certification January 2016 December 2016 Family Care Program Capitation Rates December 14, 2015 Page 2 of 2 This Opinion assumes the reader is familiar with the Wisconsin Medicaid program, Family Care programs, and actuarial rating techniques. The Opinion is intended for the State of Wisconsin and the Centers for Medicare and Medicaid Services and should not be relied on by other parties. The reader should be advised by actuaries or other professionals competent in the area of actuarial rate projections of the type in this Opinion, so as to properly interpret the projection results. Michael C. Cook Member, American Academy of Actuaries December 14, 2015

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91 Milliman Client Report Exhibit P - R CMS Documentation State of CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

92 Exhibit P Rate Setting Checklist This section of the report lists each item in the November 10, 2014 CMS checklist and discusses how DHS addresses each issue and / or directs the reader to other parts of this report. CMS uses the rate setting checklist to review and approve a state s Medicaid capitation rates. AA.1.0 Overview of Rates Being Paid Under the Contract The CY 2016 managed care organization (MCO) capitation rates are developed using 2014 Wisconsin Medicaid long term care (LTC) MCO encounter data for the MCO eligible population, along with other information. DHS sets rates by MCO and Geographical Service Area (GSR). Please refer to Sections II - IV of this report for background on the program and more details around the rate development. AA.1.1 Actuarial Certification The Actuarial Certification of the CY 2016 capitation rates is included as Exhibit O of this report. The CY 2016 Wisconsin LTC Medicaid care management capitation rates have been developed in accordance with generally accepted actuarial principles and practices and are appropriate for the populations to be covered and the services to be furnished under the contract. AA.1.2 Projection of Expenditures Appendix B includes a projection of total expenditures and Federal-only expenditures based on actual Projected CY 2016 MCO enrollment and CY 2016 capitation rates. We used a 58.27% FMAP rate to calculate the Federal expenditures. AA.1.3 Risk Contracts The Wisconsin Family Care program meets the criteria of a risk contract. AA.1.4 Modifications The CY 2016 rates documented in this report are the initial capitation rates for the CY 2016 Wisconsin Medicaid LTC managed care contracts. Note: There is no AA.1.5 on the Rate Setting Checklist AA.1.6 Limit on Payment to Other Providers It is our understanding no payment is made to a provider other than the participating MCOs for services available under the contract. AA.1.7 Risk and Profit The CY 2016 Family Care capitation rates include a targeted margin of 0.5% for risk, profit, and contribution to reserves. We believe that this margin is appropriate given low service cost trends and the predictability of expenses under the program. AA.1.8 Family Planning Enhanced Match DHS does not claim enhanced match for family planning services for the population covered under this program. December 14, 2015 Milliman Exhibit P - Page 1

93 Exhibit P Rate Setting Checklist AA.1.9 Indian Health Service (IHS) Facility Enhanced Match DHS does not claim enhanced match for Indian Health Services for the population covered under this program. AA.1.10 Newly Eligible Enhanced Match The Wisconsin Family Care program does not cover the newly eligible Medicaid population. Therefore, none of the recipients are eligible for the enhanced Federal match under Section 1905(y). AA.1.11 Retroactive Adjustments The CY 2016 rates documented in this report are the initial capitation rates for the CY 2016 Wisconsin Medicaid LTC managed care contracts and does not contain any retroactive adjustments. AA.2.0 Based Only Upon Services Covered Under the State Plan The CY 2016 rate methodology relies on CY 2014 MCO encounter data as the primary data source. Only State Plan and waiver services that are covered under the Wisconsin Family Care contract or are shown to be cost-effective in-lieu-of services have been included in the rate development. Please refer to the Non-Covered Services portion of Sections III and IV of this report for more details. AA.2.1 Provided Under the Contract to Medicaid-Eligible Individuals The CY 2016 capitation rate development methodology relies on data that includes only those eligible and currently enrolled in the Wisconsin Family Care program and does not include experience for individuals not eligible to enroll in the program. AA.2.2 Data Sources The CY 2016 capitation rates are developed using Wisconsin Medicaid long term care (LTC) MCO encounter, eligibility, and functional screen data for CY 2014 for the MCO eligible population as the primary data source. Please refer to Sections III - IV of this report for more details. AA.3.0 Adjustments to Base Year Data All adjustments to the base year data are discussed in Sections III - IV of this report. In addition, each item in the checklist is addressed in items AA.3.1 AA.3.17 below. AA.3.1 Benefit Differences The base data used to calculate the capitation rates has been adjusted to only include services covered under the Medicaid care management program contract. Step 5 in Section III outlines a benefit change implemented between the base period year and the contract period. AA.3.2 Administrative Cost Allowance Calculations The MCO capitation rates include explicit administrative allowances by rate cell. Please see Step 6 in Sections III and IV of the report for more details regarding the administrative cost calculation. December 14, 2015 Milliman Exhibit P - Page 2

94 AA.3.3 Special Populations Adjustments Exhibit P Rate Setting Checklist The 2016 capitation rates methodology does not include an adjustment for special populations as the base MCO encounter data used to calculate the capitation rates is consistent with the Wisconsin Family Care program population. AA.3.4 Eligibility Adjustments The base MCO encounter data only reflects experience for time periods where members were enrolled in a Family Care MCO. AA.3.5 Third Party Liability (TPL) The managed care organizations are responsible for the collection of any TPL recoveries. The MCO encounter data is reported net of TPL recoveries, therefore no adjustment was necessary. AA.3.6 Indian Health Care Provider Payments The MCOs are responsible for the entirety of the IHC payments, which are fully reflected in encounters. AA.3.7 DSH Payments DSH payments are not included in the capitation rates. AA.3.8 FQHC and RHC Reimbursement The MCOs are responsible for the entirety of the FQHC and RHC payments, which are fully reflected in encounters. AA.3.9 Graduate Medical Education (GME) GME payments are included as part of the hospital reimbursement formula. Therefore, the base data used in the capitation rate calculation includes GME payments. Separate FFS payments are not made to hospitals for members covered under managed care. AA.3.10 Copayments, Coinsurance, and Deductibles in Capitated Rates The Wisconsin Family Care program does not include member cost sharing, so no adjustment to base period experience for this issue is required. AA.3.11 Medical Cost / Trend Inflation Trend rates from CY 2014 to CY 2016 were developed by rate category and type of service for Family Care eligible services and individuals using historical MCO encounter data from January 2011 to December 2014 and actuarial judgment. The trend rates and inflation factors represent the expected change in per capita cost between CY 2014 and CY 2016, net of acuity changes. Please see Sections III and IV and Exhibit R for more details on the trend development. AA.3.12 Utilization Adjustments Utilization trend is included in AA December 14, 2015 Milliman Exhibit P - Page 3

95 AA.3.13 Utilization and Cost Assumptions Exhibit P Rate Setting Checklist The CY 2016 capitation rates use an actuarially sound risk adjustment model to adjust the rates for each participating MCO in a particular GSR in order to reflect the acuity of enrolled members. Acuity adjustments were applied independently from the unit cost and utilization trend adjustments. AA.3.14 Post-Eligibility Treatment of Income (PETI) Capitation rates are developed net of patient liability. Encounter payment amounts are net of patient liability, so no adjustment to the data is necessary for this issue. AA.3.15 Incomplete Data Adjustment The capitation rates include an adjustment to reflect IBNR claims. Please refer to Sections III and IV of this report for more information on the development of these adjustment factors. We also apply an adjustment to true up care management expenditures to financial statements due to the difficulty in properly and completely collecting this information in the encounter data reporting format. Please refer to Sections III and IV of this report for more information on the development of these adjustment factors. AA.3.16 Primary Care Rate Enhancement The CY 2016 capitation rates only include Long-Term Care services. AA.3.17 Health Homes Not Applicable. AA.4.0 Establish Rate Category Groupings Please refer to Sections III and IV of this report. AA.4.1 Eligibility Categories Target populations for individuals meeting the nursing home level of care requirement are defined in Step 1 of Section III. AA.4.2 Age Age is not used for rate category groupings outside of the Target Population assignment. AA.4.3 Gender Gender is not used for rate category groupings. AA.4.4 Locality / Region Geographic regions are defined in Step 1 of Section III and Appendix A. AA.4.5 Risk Adjustments Acuity adjustment models are described in Step 2 of Section III (NH eligible) and Step 3 of Section IV (Non NH eligible). December 14, 2015 Milliman Exhibit P - Page 4

96 Exhibit P Rate Setting Checklist AA.5.0 Data Smoothing While we did not perform any explicit data smoothing, the High Cost Risk Pool (HCRP) is being implemented in 2016 to help spread risk associated with very high cost members across MCOs. The HCRP is described in AA.6.0. AA.5.1 Cost-Neutral Data Smoothing Adjustment We did not perform any data smoothing. AA.5.2 Data Distortion Assessment Our review of the base MCO encounter data did not detect any material distortions or outliers. AA.5.3 Data Smoothing Techniques We determined that a data smoothing mechanism resulting from data distortions was not required. AA.5.4 Risk Adjustments The CY 2016 capitation rates use an actuarially sound risk adjustment model based on a functional screen (NH level of care) or ADL/IADL (Non NH level of care) to adjust the rates for each participating MCO. Please see Sections III and IV of this report. AA.6.0 Stop Loss, Reinsurance, or Risk Sharing Arrangements Effective January 1, 2016, DHS is implementing a High Cost Risk Pool (HCRP) for the Developmentally Disabled and Physically Disabled populations. The HCRP will not be implemented for the Frail Elderly population due to the low probability of reaching the cost threshold. The HCRP is targeted to cover 80% of provider service costs above $225,000 for each individual and excludes Care Management expenses due to increased administrative burden to include them in this process. A pooling charge of $23.18 PMPM for the Developmentally Disabled population and $3.35 PMPM for the Physically Disabled population will be assessed from each MCO and placed into a pool. At year end, a settlement will be performed to determine payout to MCOs for each target group separately. Each MCO will receive the portion of each target group s pool equivalent to their percentage of total pooled costs statewide. MCOs may effectively have more or less than 80% of an individual s CY 2016 costs greater than $225,000 reimbursed depending on whether actual CY 2016 pooled costs are greater than or less than the target group pools. Individuals will be evaluated over their enrollment period, and $225,000 threshold will not be pro-rated for partial year enrollment. AA.6.1 Commercial Reinsurance DHS does not require entities to purchase commercial reinsurance. AA.6.2 Stop-Loss Program Please see AA.6.0. AA.6.3 Risk Corridor Program Not applicable December 14, 2015 Milliman Exhibit P - Page 5

97 Exhibit P Rate Setting Checklist AA.7.0 Incentive Arrangements DHS will provide a one-time incentive payment to the MCO for each MCO member who is relocated from an institution into a community setting consistent with federal Money Follows the Person (MFP) guidelines. AA.7.1 Electronic Health Records (EHR) Incentive Payments DHS has not implemented incentive payments related to EHRs for the CY 2016 contract period. December 14, 2015 Milliman Exhibit P - Page 6

98 EXHIBIT Q RESPONSE TO DRAFT 2016 MANAGED CARE RATE DEVELOPMENT GUIDE (JUNE 2015) I. MEDICAID MANAGED CARE RATES 1. General Information A. The rate certification included herein is for the January 2016 December 2016 contract period. The previous certification was for January 2015 December 2015 contract period. B. We believe that the attached report properly documents all the elements included in the rate certification and provides CMS enough detail to determine that regulation standard are met. Please see Sections I, III, and IV of this report for the following details: Data used, including citations to studies, research papers, other states analyses, or similar secondary data sources assumptions made, including any basis or justification for the assumption; and methods for analyzing data and developing assumptions and adjustments C. We detail within our responses in this guide the section of our report where each item described in the 2016 Medicaid Managed Care Rate Development Guide can be found. D. The rate certification and attached report include the following items required by CMS: 2. Data i. Our actuarial certification letter signed by Michael Cook, FSA, MAAA certifies that the final capitation rates meet the standards in 42 CFR The certification can be found in Exhibit O. ii. The final and certified capitation rates for all rate cells and regions can be find in Exhibits G and N. iii. Rate ranges are not certified. Therefore, this requirement does not apply. iv. The items requested can be found in Sections I and II of this report. A. Our report includes a thorough description of the data used. i. A detailed description of the data can be found in Sections III and IV of this report. ii. Sections III and IV of this report include comments on the availability and quality of the data used for rate development. iii. The rate development methodology uses current MCO encounter data. iv. The rate development methodology uses recent MCO encounter data. v. The rate documentation methodology does not use a data book separate from what is shown in the rate report. B. The rate certification and attached report thoroughly describe any material adjustments, and the basis for the adjustments, that are made to the data. Please see Section III and IV of this report for more details. 3. Projected Benefit Costs A. Please refer to Sections III - IV of this report for the methodology and assumptions used to project contract period benefit costs. Section I of the report highlights key methodological changes since the previous rate development. December 14, 2015 Milliman Exhibit Q - Page 1

99 EXHIBIT Q RESPONSE TO DRAFT 2016 MANAGED CARE RATE DEVELOPMENT GUIDE (JUNE 2015) B. Sections III and IV of this report include a discussion on the methodology used to develop benefit utilization and unit cost trends. Exhibit R outlines the results of our trend analysis. In addition, we update projected costs for the most recently available functional screen acuity information and project additional acuity trend through the contract period. C. Sections III and IV of this report include a discussion on the treatment of in-lieu-of services and their inclusion / exclusion from the capitation rate development. D. The CY 2016 capitation rate development methodology relies on base period data that includes only those eligibles actually enrolled in the Wisconsin Family Care program, so no adjustment for retroactively eligibility periods is needed. E. The various Exhibits included in this report document the final projected benefit costs by relevant level of detail and is consistent with how the State makes payments to the plans. F. We are not aware of any benefit changes since the last certification, though we do make one adjustment to 2014 base period data to account for a very small new 2015 covered benefit as outlined in Section III. G. Please refer to Sections III of this report for the methodology and assumptions used to project benefit costs for the new 2015 covered benefit. 4. Pass-Through Payments A. The CY 2016 capitation rate methodology does not include any pass-through payments. B. The CY 2016 capitation rate methodology does not include any pass-through payments. C. The CY 2016 capitation rate methodology does not include supplemental payments. 5. Projected Non-Benefit Costs A. Please refer to Step 6 in Sections III - IV of this report for a detailed description of the data and methodology used to develop of the projected non-benefit costs included in the capitation rates. The report includes a description of changes made since the last rate development. B. The administrative and targeted margin components of the non-benefit costs are separately identified in the report. Care management costs are treated as service costs in rate development. There are no applicable taxes, fees, or assessments. C. The non-benefit costs included in the CY 2016 capitation rates are developed as a per member per month for common categories of administrative expenses. D. The Wisconsin Family Care program covers only LTC services. As such, the revenue received by participating providers does not accrue a Health Insurance Providers Fee (HIPF) liability. 6. Rate Range Development A. There is only one rate for each MCO / GSR combination. We did not develop a rate range. B. There is only one rate for each MCO / GSR combination. We did not develop a rate range. December 14, 2015 Milliman Exhibit Q - Page 2

100 EXHIBIT Q RESPONSE TO DRAFT 2016 MANAGED CARE RATE DEVELOPMENT GUIDE (JUNE 2015) 7. Risk Mitigation, Incentives, and Related Contractual Provisions A. The functional screen and risk adjustment and High Cost Risk Pool mechanisms detailed in Sections III and IV of the report. Other payment mechanisms not reflected in the reported monthly capitation rates are outlined in Section V. B. The functional screen risk adjustment and High Cost Risk Pool mechanisms are actuarially sound and cost neutral to the state in total. C. All risk mitigation mechanisms are cost neutral to the state. The functional screen risk adjuster is also utilized to develop projected acuity trends separate from benefit utilization and unit cost trends. D. The High Cost Risk Pool is described in Sections I, III, and IV of this report. E. The contract does not have a medical loss ratio requirements. F. The contract does not contain any reinsurance requirements. G. A member relocation incentive is described in Section V of the report. These incentives will not exceed 5% of the certified rates, and we made no adjustment for the incentive payments in rate development. There are no withholds other than those associated with the High Cost Risk Pool. 8. Other Rate Development Considerations A. All services and populations covered under the Family Care program are subject to the same Federal Medical Assistance Percentage (FMAP). B. We believe that this rate certification and supporting documentation adequately demonstrate that the rates were developed using generally accepted actuarial practices and principles. 9. Procedures for Rate Certifications for Rate and Contract Amendments The CY 2016 rates documented in this report are the initial capitation rates for the CY 2016 Wisconsin Medicaid LTC managed care contracts. II. MEDICAID MANAGED CARE RATES WITH LONG-TERM SERVICES AND SUPPORTS 1. Managed Long-Term Services and Supports A. The Wisconsin Family Care program only covers Long-Term Care services. Therefore, the information included in this rate certification and report is specific to MLTSS. B. The Wisconsin Family Care program capitation rates are a blend of the various target groups eligible for the program. Details behind the target group assignment is included in Section III of this report. The risk adjustment methodology utilizes functional screen, diagnostic, behavioral, and demographic information, while excluding setting of care. This effectively functions as an enhanced method of blended rate cells. This rate cell structure aligns with the 2013 guidance around MLTSS programs C. The Wisconsin Family Care managed care program is considered mature and has been in operation since We did not project additional changes in settings of care, beyond those that were reflected in the recent experience utilized to develop benefit cost and acuity trends. We expect that care management activities will continue to provide care to patients in the most cost effective setting and prevent nursing home admissions. December 14, 2015 Milliman Exhibit Q - Page 3

101 EXHIBIT Q RESPONSE TO DRAFT 2016 MANAGED CARE RATE DEVELOPMENT GUIDE (JUNE 2015) D. The Wisconsin Family Care program only covers Long-Term Care services. Therefore, the program administrative cost study and projected non-benefit costs in this rate report are specific to MLTSS. E. The Wisconsin Family Care capitation rates presented in this report are based entirely on historical MCO encounter data and financial experience. III. NEW ADULT GROUP CAPITATION RATES This certification does not include rates for the new adult group under 1902(a)(10)(A)(i)(VIII) of the Social Security Act. December 14, 2015 Milliman Exhibit Q - Page 4

102 Exhibit R Family Care Trend Development PMPM Costs CY 2011 CY 2012 CY 2013 CY Annual Trend Selected Trend Developmentally Disabled 3, , , , % 1.3% Physicially Disabled 2, , , , % -0.6% Frail Elderly 2, , , , % 2.2% Acuity/Risk Scores CY 2011 CY 2012 CY 2013 CY 2014 Developmentally Disabled % 1.30% Physicially Disabled % -1.10% Frail Elderly % 0.30% Risk Adjusted PMPM Costs CY 2011 CY 2012 CY 2013 CY 2014 Developmentally Disabled 3, , , , % 0.00% Physicially Disabled 2, , , , % 0.50% Frail Elderly 2, , , , % 1.90% 12/14/2015 Milliman Page 1

103 Milliman Client Report Appendix A State of CY 2016 Capitation Final Rate Development for Family Care Program December 14, 2015 This report assumes that the reader is familiar with the State of Wisconsin s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to DHS to set CY 2016 capitation rates for the Family Care program. It may not be appropriate for other purposes. Milliman does not intend to benefit, and assumes no duty or liability to, other parties who receive this work. This material should only be reviewed in its entirety.

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